TURN OUT THE LIGHTS

(THE TWILIGHT’S MOST RECENT GLEAMING):

THE METAPHYSICAL CAUSES OF ECONOMIC CYCLES

The party's over,

It's time to call it a day

They've burst your pretty balloon

And taken the moon away.

It's time to wind up the masquerade

Just make your mind up

The piper must be paid.

The party's over

The candles flicker and dim

You danced and dreamed through the night

It seemed to be right

Just being with him.

Now you must wake up,

All dreams must end

Take off your makeup,

The party's over

It's all over, my friend

-Words by Betty Comden and Adolph

Green and Music by Jule Styne

By

Michael J. Clark

House 35a

Alley 31/46

Xuan Dieu Road

HoTay District

Hanoi, Vietnam

Tel 84 04 2219 2210

Cell phone 01219069743

mclark7@mindspring.com

16 March 2011

TURN OUT THE LIGHTS:

THE TWILIGHT’S MOST RECENT GLEAMING

THE METAPHYSICAL CAUSES OF ECONOMIC CYCLES

For Alan Greenspan,

the last of the great white whaleboat captains.

The White Whale swam before him as the monomaniac incarnation of all those malicious agencies which some deep men feel eating in them, till they are left living on with half a heart and half a lung. That intangible malignity which has been from the beginning; to whose dominion even the modern Christians ascribe one-half of the worlds; which the ancient Ophites of the east reverenced in their statue devil; -- Ahab did not fall down and worship it like them; but deliriously transferring its idea to the abhorred white whale, he pitted himself, all mutilated, against it. All that most maddens and torments; all that stirs up the lees of things; all truth with malice in it; all that cracks the sinews and cakes the brain; all the subtle demonisms of life and thought; all evil, to crazy Ahab, were visibly personified, and made practically assailable in Moby Dick. He piled upon the whale's white hump the sum of all the general rage and hate felt by his whole race from Adam down; and then, as if his chest had been a mortar, he burst his hot heart's shell upon it.

Herman Melville, Moby-Dick, p. 200.

“…repeal of Glass-Steagall would provide significant public benefits consistent with a manageable increase in risk.”[

Alan Greenspan, November 18, 1987

INTRODUCTION

“I found a flaw in the model that I perceived as the critical functioning structure that defines how the world works"

ALAN GREENSPAN, 2008

Man Is Instructed Through Writing

Writing, for me, is an act of discovery. It is a turning of the mind’s occasionally-lucid light on a darkened landscape of ideas, hoping (and sometimes trusting) that illumination will occur. I write in order to see reality more clearly. Writing is an act of focusing the mind through a high-powered lens (vision) on things hidden in nature, images existent in dark energy, dream matter – using the mind to draw these hidden things out into the open.

Writing, for me, is not a linear experience – it sometimes involves wandering from object to object – this can be maddening for some readers who appreciate the diameter more than the circle. Writing, for me, is a weaving in and out of ideas, in and out of symbols, in and out of meanings, which, when stitched together, create a visible object, a tapestry built by metaphor into a recognizable form.

In this way poetry is different than prose. Poetry leaps from idea to idea; poetry wanders, gets lost sometimes. Prose is causal, building an argument in a linear fashion, laying out a matrix based on temporal logic of cause and effect.

This books is a poet’s view of history, a poet’s view of the real (non-linear) causes of historic manifestations. As such, a reader must allow for the occasional drifting in and out of what may seem like foreign, unrelated landscapes, These landscapes are, trust me, connected, but perhaps not connected in a linear fashion. A spider spins a web as a whole structure, each part necessary to the whole – but not every strand of the structure is directly connected to every other strand. The structure of this book is somewhat like the structure of a spider’s web.

I began this book as an attempt to rationalize (clarify) my own understanding of my immediate environment, which had been darkened suddenly by a constellation of events: my own retirement surely (2008); also the sudden capital destruction of Western Civilization through the devastation of a top-heavy financial system (called a ‘crisis’ by those attempting to transmute it) seemingly constructed with great care by the self-congratulating ‘masters of the universe’ on Wall Street, in London and in other western world capitals.

How had this happened? Where would it lead?

Did I retire at almost exactly the wrong moment, considering this financial system implosion?

I had a fairly clear understanding when I began this book of the metaphysical engine driving History’s constructions (erections) and de-constructions (flaccidations): that human and historical manifestations on earth were divided into periods of Day (activity, building, masculine solar organizing physical energy) and periods of Night (relative inactivity, de-construction, feminine lunar dis-organizing metaphysical energy) – anti-entropy (negentropy) and entropy. Yin and yang; Days of Brahma/Nights of Brahma: these ideas were not new.

In fact, all great poetry, poetry of scale, is about the true structure of reality, both visible and invisible realities. Poetry is the language of the Night-Cycle. One who cannot comprehend poetry will not comprehend the Book of Nature, for the poetric mind puts together all the parts of reality that the causal mind, the Day-Cycle mind, has taken apart.

The Day-Cycle mind dismantles to study, isolates to understand, specializes to conquer smaller and smaller bits of territory. To the Day-Cycle mind, every thing is different, unique, and separate. The Night-Cycle mind views everything as being similar, of like nature; to the metaphorical mind, this is like that in this way or that way. The Day-Cycle mind isolates, cleaves, and, ultimately, alienates, conquering through division and separation – we must remember that the Day-Cycle mind gets his truth, his bearings, by moving away from God, out of the Night, into the Light, the light of independence and individuality. The Night-Cycle mind conquers by reassembling the jig-saw puzzle, moving back toward God, back toward the Unity that the Day-Cycle mind has abandoned.

I did not expect, however, when I began writing this book, for this Day/Night sequence to appear in history with such regularity as to make it predictable.

In the process of writing this book, I discovered or uncovered a 36-year cycle in American economic expansions (top to top) and an 18-year half-cycle (top to bottom). Was this kind of precision possible in Nature?

The mind will try to organize chaos into a rational system in order to give itself some security in confronting the shapelessness, the nothingness, the chaos, of reality. Perhaps these precise cycles are nothing more than an example of man’s mania for mental organization which gives the human mind the illusion of ‘knowing’.

Still, I have come to believe or understand – through seeing – that the most recent Day-Cycle of Western Economic Expansion ended (or should have ended) in 2001, when the Dot Com Bubble burst. At this point Alan Greenspan should have begun slowly raising interest rates in order to begin squeezing excess liquidity out of the system. Instead, of course, he did the opposite, lowering rates in order to increase credit, increase liquidity.

Day-Cycles, metaphorically-speaking, are a process of filling an empty glass. Financially-speaking, one fills an empty glass by lowering interest rates, by investing cash to fund company expansion, and, eventually, by taking on debt to continue the expansion. This is the Growth Season of the Business Cycle. The debt-building cycle signals the late season of the Business Cycle’s expansion season. This began in America most recently in 1983 and ended in 2001.

Day-Cycles fill the empty glass. Greenspan, in 2001, and Ben Bernanke, after Greenspan, in an even more irresponsible manner (borne out of greed and fear), by attempting to further fill an empty glass, causing the glass to overflow, caused the flood in the global financial system from which we still have not recovered, no matter what Ben Bernanke tells us.

Day-Cycles fill the empty glass. Night-Cycles empty the full glass. Both seasons are necessary. Both seasons have their logic and reason and, if followed, become the process by which a temporal form of ‘eternal duration’ – eternal life – becomes possible.

Day-Cycles illustrate the process of an expanding universe, debt being the ‘matter’ aspect, which grows more and more dense until it reaches critical mass, and collapses the creation (construction transforms in to deconstruction).

Day-Cycles are the Big Bang season, and the subsequent expansion. Night-Cycles are the Big Crunch season, when the universe, under the pressure of collapsing matter, implodes back into the seed, prior to the next Big Bang and re-expansion.

The Big Bang fills the glass. The Big Crunch empties the glass.

As Above, So Below

A strong, sane Fed Chair would have begun slowly raising rates in 2001 in order to begin an orderly debt-emptying process. This would have led, of course, to a contraction of the economy – contractions are inevitable, built in to the system, as Nights are built in to the system which governs growth on the Earth. Had the Fed Chair begun slowly raising rates in 2001, almost every problem we have had since 2001 would have been avoided.

Bubbles in the financial system (think of this as a smooth fabric with sudden extrusions) are disturbances, signs of Over-Expansion, signs of naked desperation, panic buying, hoarding, floods.

Rates should have been raised slowly beginning in 2001, and should continue higher until about 2019. Depressions – and make no mistake, we are in a depression – bubbles do not negate depressions, they only make them more violent and more destructive – exist in order to wring execessive and bad debts out of the system. Depressions are ultimately acts of de-construction, implosion, subtraction, emptying out, returning ‘nature’ from the ‘fruiting season’ – the ultimate extension of the Day-Cycle, the Business Cycle’s Growth Season – back to the sterile, cold, Winter: the ‘seed season’. The Big Crunch indeed.

We get depressions every 36 years whether we like them or not. They are the Winter of the human social seasons, the emptying of the full glass.

My intent in this book is to examine both sides of this historical process: the ‘Lord gives’ side, the expansion, the filling-up, the becoming Lord of the Physical World (Light), and the ‘Lord takes away’ side, the contraction, the emptying-out, the becoming Lord of the Metaphysical World (Darkness).

I will also examine the concept in light of modern physics: the Day-Cycle involves the expansion of Phuysical Matter; the Night-Cycle involves the expansion of Anti-Matter. The emptying out of the Physical Glass (the Physical Body) is, at the same time, the filling up of the Metaphysical Glass (the Soul). These opposite forces (expansion-contraction) evolve one another; they appear to be adversaries; they are, in truth, partners, helping one another evolve through enforced periods of rest (dreaming, or imagining a new reality, first, in metaphysical or dream matter, anti-matter) and activity (attempting to build the dream in physical reality, physical matter).

I say the Fed Chair should have begun raising rates in 2001 – instead, Federal Reserve Chairman Alan Greenspan – in a kind of mad positivistic ideological reaction, reminiscent of Ahab in Melville’s classic novel, Moby Dick – began devaluing the American Dollar hand-over-fist in an attempt to avert the deflation that America, in fact, needed in order to re-balance the inflationary financial bubble-factory that was driving America toward an economic precipice.

Greenspan made his colleagues on Wall Street billions of dollars in the process of course -- before it all came crashing down. Greenspan then took a job (clearly paying him millions) with John Paulson, an international speculator, who made billions from the American housing bubble that Greenspan helped to create and nurture – by shorting housing and profiting from its collapse.

If politics make strange bedfellows, finance makes creepty trysts – none seem more creepy at the moment than Alan Greenspan married to the hip of John Paulson.

Bernanke, today, is doing the same – and is even more villainous than Greenspan was, conscious now that he is a serial bubble-blower – greed boom-cycles, followed by horrid bust implosions – all in order to protect the wealth-centers of the world, the ‘risk-takers’ on Wall Street an din financial capitols around the world, who are swimming in bad debt and would be ruined by higher interest rates. Bernanke is slaughtering the US Dollar in order to protect the rich and their bad debts. Bernanke is sacrificing the American public and helping crucify the world’s poor by using devaluatio of the Dollar to create asset bubbles in commodities and stock markets, forcing food prices up to all time highs. Forty million families are receiving food stamps in American in 2011, of roughly 110 million total households – meaning almost 50% of households need state help in order to eat. Food riots are breaking out all ove the world. Governments are falling in the Middle East because of food-price inflation combined with contracting economies.

Cheap money; more debt; higher unemployment – how, again, did this formula translate into a stronger, leaner, more competitive America? It didn’t. It translated only into more debt for most Americans and for the American government – and more wealth – an obscene amount of wealth in fact – for a handful of America’s ruling class, those in banking, finance, and insurance especially, but also in housing and energy.

The Day-Cycle expansion sees an increase in the gap between rich and poor. The Day-Cycle is pro-business, pro-rich, pro-empire. The Night-Cycle, of course, reverses all of this, reduces the gap between rich and poor, usually through confiscatory tax policies – but also by revolusions where tax reforms and redistrubtion of wealth are resisted by the wealthy (and the governments they seek and usuall come to own – as Wall Street has come to own our government).

During Night-Cycles, the poor ‘get even’ with the rich.

The Rich and Powerful Suddenly Become Naked

An example of this obscene level of wealth is former Secretary of the Treasury (and CEO of Goldman Sachs) Henry Paulson who made, it has been reported, more than $400 million dollars in his position at Goldman Sachs, then transferred his power seat to the Bush Administration, then blackmailed the U.S. Congress (and through them the American citizen) for trillions of dollars of taxpayer money to bail out his friends at Goldman Sachs and other power-centers on Wall Street when the pyramid scheme they had collectively constructed collapsed in 2008.

I remember reading what a great ‘master of the universe’ Hank Paulson, a giant of finance, a titan of American commercial life – a genius, indeed. Really? And I had been wondering why this titan of finance was not sharing a prison cell with everyone’s favorite thief, Bernard Madoff? Paulson’s plundering of the American Treasury is the greatest act of thievery in the history of the Earth – that is, until Ben Bernanke came to power.

Paulson’s billions are impressive (“It didn’t have to be a trillion, it just had to be a big number,” Plaulson is reported to have said. Intimidation was the key – intimidation of the American government and the American people – and free money for his friends on Wall Street.) No wonder they love Hank Paulson on Wall Street – he’s the kind of man legends are made of.

But then came along the squirrely Bernanke – looking like Wally Cox jacked up on some kind of Viagra or steroid treatment. He outdid Paulson. He reasoned that a terminal sickness of too much debt could be cured with more debt. The full glass he saw sitting on his desk neaar his microphone did not need to be emptied – he, Bernanke, needed to keep over-filling the glass so that the emptying process could not succeed.

Why must the emptying process fail? Because he and all his friends – the white prostetant mafia on Wall Street – would be ruined if the glass was emptied. They owned the glass; they owned the water in the glass; and less wter, instead of more eater, would destroy they financially.

Bernanke reasoned that stalling was the Fed’s only option – stall, tread water (again the water image), extend and pretend, take on more debt, keep the glass always full, until ‘normal’ economic growth returned and lifted prices back up to their optimal levels, where the growth-led expansion would take asset prices up to another level – always higher, always higher. What Bernanked did not understand was – like the Japanese before him – high levels of debt retard growth. Debt is like the weeds in the garden. Unless one destroys the weeds, plants will continue to be strangled by debts. Economies cannot grow after the debt-level reaches a critical-mass, the chemically ‘critical’ point, after which debts in to lead, creating a goxic disintegration.

With his Quantative Easing policies (‘QE’ – has there ever been a more nauseating euphemism, bland and technical, so much more ‘intellectual’ than the term it replaced, ‘bailout’? How many QE’s must there be before we understand what it really is?) Bernanke has essentially continued the trillion dollar bail-outs – changing the word ‘bailout’ to ‘Quantataive Easing’ – like Goebbels he is insisting on the Big Lie) by funneling taxpayer money to Wall Street (free money, loans at 0% interst), guaranteeing the same banks and entrepreneurs and ‘risk-takers’ – the former “Masters of the Universe” -- profits by promising to buy every US Treasury Bond no one else would buy, keeping a lid on interest rate levitation, and working with the banks to ‘guarantee’ a stock market rally. The stock market rallies since 2008 have all been purchased by the Federal Reserve using taxpayer money to generate a facsimile of a real bull market rally. These rallies – Bernanke’s Bull Runs – will ‘peter-out’ as soon as Bernanke’s game of financing asset inflation from the American treasury is seen for what it really is: monetizing debt through the attempted destruction of the US Dollar, which is just another asset-bubble building exercise.

As long as we have Fed Chairs who are afraid of recognizing both sides of the equation -- The Day side of expansion (lower rates, leading to prosperity and material power) AND the Night side of contraction (higher rates, leading to less properity and material power, but returning power to the local currency through, eventually, increased solvency) we will have monetary policy that regulates nothing but the speed of the (mostly hidden) rate of inflation.

Day-Cycle Leadership That is Philosophicaly Bankrupt

Our current leaders – Day-Cycle leadership -- are philosophically bankrupt, devoid of a comprehensive understanding of nature. Of course, our leaders own the world – and they are not really interested in a blanced view: they want more and more; they always want more and more.

Not only have Geenspan and Bernanke been remiss and philosophically bereft, I believe they have also been criminal. Funding stock market rallies, in collusion with Wall Street, is insider trading running wild. Both men should be investigated for crimes of graft and misuse of power. Bernanke should be impeached. And Wall Street should be forced to pay back all of the free money they have received from Federal Reserve policy that ‘stole’ money from bank depositors through forced 0% interest payment policies, but also filled up bank coffers with artificial ‘bail-out’ disguised as attempts at ‘credit crunch’ medicine.

The credit crisis has never really been a credit crisis. It has always been a solvency crisis.

We have too much debt – and we are lying to ourselves, pretending this is not the problem. If we eliminate the Fed subterfuge, rject the smoke and mirrors, and the unspeakable lies dressed up in fancy euphemisms (QE, for example), we will see that our glass has been filled to the top – we need to empty the debt glass.

We empty the glass (1) by raising taxes, especially on rich Americans and corporations; (2) by cutting government spending – and, during Night-Cycles, during depressions, when public services are more needed than ever, this means cutting government spending on non-human support services, including military spending; (3) by raising interest rates, encouraging saving, and forcing bad debt out into the open, forcing it to be paid down, where possible, or forcing default on bad debts. The rich don’t want higher rates because they both own bad debt and will be hurt by such defaults, and they also hold bad debt and will be forced to default themselves.

When Alan Greenspan admitted that he found a flaw in his reasoning in 2008 – ‘a flaw in the model that I perceived as the critical functioning structure that defines how the world works’ – he was referring to his opposition to regulation of derivatives and to his assumption that financial institutions could be expected to police themselves. I believe he is correct in this assessment – Greenspan clarified that he was only ‘partially wrong’ however – not enunciating what ‘partially’ really meant in the context of his confession.

Actually, I think the ‘fatal flaw’ in Greenspan’s logic had more to do with the lack of recognition that one cannot fill and empty glass – and should not try to. This is a philosophical flaw – one that distorts the foundation of one’s assumptions about reality.

The Fed’s job – if America decides she really wants and needs a Fed – at the moment I would say America certainly does not need a Fed any longer with current dictatorial powers and with almost no effective oversight – must be BOTH the filling of the glass when it is empty and the emptying of the glass when it is full. Greenspan’s argument that it is hard to tell when a bubble is forming is disingenuous palaver. Hundreds if not thousands of American financial analysts warned about the dangers of the Housing bbubble years before the bubble actually popped. The Fed, as currently constituted, works for the invisible government of the international banking system, first and foremost, – and puts the banking system’s needs ahead of America’s needs. This is unacceptable.

The Fed should be audited immediately no matter how much enbarassment this may cause for the Fed or the government. If an audit shows that Fed officials broke the law by giving Aemrican taxpayer money to non-American banks during the trillion dollar bailouts (the first or the continuing bailout) or if they used taxpayer money to juice stock markets over the years (American or foreign markets) to prevent losses for investors (especially for Wall Street corporations) then arrests should be made, even if this means Messers Greenspan or Bernanke go down with the ship.

The Most Recent Day-Cycle Ended in 2001

I have written that the most recent Day-Cycle ended in 2001.

I need to clarify this expression Day-Cycle, which I am misusing now, in a sense. There are two dimensions to these cycle descriptions: a vertical dimension, and a horizontal dimension.

The Day-Cycle, more accurately, runs from Dawn to Dusk, from Morning (Mourning) to Evening (as in ‘evening out of’). So, literally, the most recent Day-Cycle ran from Dawn (1992) to Dusk (2010). It is instructive that we began to see poor-against-rich demonstrations right on time in 2010, first in Bangkok, and then through the Middle East. In this sense, the Darkness has only now begun to ‘win’, and will continue to ‘win’ until 2028, at which time the “Day” will begin again.

This is the ‘horizontal’ dimension, East and West, the Human Dimension, as opposed to the Divine Dimension, North and South.

The Horizontal Dimension is secular by definition. The battle fought out here is between the Female and Male secularisms, Communism and Capitalism.

The Vertical Dimension is actually more what I have been addressing up to this point, using misleading nomenclature until now. The ‘filling up’ process, in fact, occurs in the Winter-Summer Growth Cycle, during which time period ‘light’ (remember, light is matter) begins in a seed-like condition (buried in the Earth at Winter), which is the basis of the pagan ritual of Christmas and of the Christian myth of Christ’s birth, the Solar Hero, who, after emptying out, is re-born as a child and begins his ascension into heaven – this, in fact, is the ‘filling up’ process.

The ‘emptying out’ process is the Summer-Winter contraction season, the fall of the Sun Hero, beginning in Summer and concluding at the end of Autumn, when the ‘fall’ ends.

Words have esoteric meanings, descriptions of time-processes, hidden in their etymologies.

The Vertical Dimension involves a Seed-to-Fruit time-process, the ‘filling up’ movement from Earth to Sky, from Earth to Air. It also involves a reverse Fruit-to-Seed decline, an ‘emptying out’ movement from Sky back down to ‘burial’ in the Earth, a movement of Sun – the Crown of Creation – of Fire into Water, of Man back into Woman, back into the Womb, precedent to re-birth.

The reader will notice that I begin to include zodiacal markers in my Time-Wheel – for the zodiac was the earliest human macro-clock – as the atom is now the most recent human version of the micro-clock. In the study of Darkness and Light, ancient human culture has excavated deep and enduring understandings which have been lost by modern man. Overthrown in fact. Modern Man is the Day-Cycle; Ancient Culture (the Primitives) are the Night-Cycle.

The Day-Cycle buildings civilizations – that is its calling. The Night-Cycle destroys civilizations – that is its calling.

The Day-Cycle builds civilizations, establishes empires – is empirical in doing this, in fact -- Man’s Monuments to himself -- by trying to exorcise Death from its vocabulary. The Night-Cycle is tribal by nature, and worships Nature and Nature’s Monuments (God’s creation), which is Death to the empire-builder.

In the City, Man can be huge, the center of the universe.

In Nature, Man is small, man is on his knees before God, empty, asking God to protect and guide him.

The Day-Cycle is the locus of ambition, and pride, and self-worship. Hubris. Sin. Imbalance. Greed. Political Tyranny. Physical Power. Love of Pleasure. The Day-Cycle is the King.

The Night-Cycle is the locus of contrition, self-sacrifice, confession of sins, death, alchemical transmutation, purification, poverty of spirit, love of humiliation and desereved pain. The Night-Cycle is the Priest or the Monk.

The almost-perfect human emblem of the Day-Cycle is Julius Caesar. The almost-perfect human emblem of the Night-Cycle is Jesus Christ.

God the Father lives in Heaven and sends his Son down to Earth seeking redemption – for the Father’s own sins.

It is the Son who gives the Father Eternal Life by going down into the dark sea, the valley of death, taking up residence in the womb again, the Mother Principle, Nature, assenting to his own martyrdom, dying so that the world might live: to bring Light again to the world, after it endures the Darkness of another Night-Cycle again for almost too long. But nothing lasts too long. Everything is right on time.

Events in Physical Reality Are Time-Element Symbols

We look at events in physical reality as symbols defining ‘the time’ we are passing through. 2001 was the culmination of the ‘positive’ energy of Day-Cycle civilization-building and the advent of the ‘negative’ energy as nascent Night-Cycle activity begins condensing from its point or seed again. Of course, September 11 is the almost perfect symbol of this ‘changing of the guard’, or changing of the alternative electrical current from positive to negative. Fundamentalist, Extremist Muslims – crusaders for the Antimatter Cause – anti-heroes hating the corrupt civilization, acting on behalf of God and Nature-- attacked American commercial, cultural, political and military symbols, the utter destruction of the Twin Towers in New York City being the most devastating of these attacks – and the most symbolically potent – an undisguished castration symbolism, evisceration of the Sun Hero, of creeping civilization, global trade, and the cancerous, ruthless spread of the international monetary empire -- with attacks or planned attacks also targeting the Pentagon and the White House.

The Day-Cycle is white. The Day-Cycle fruiting (the fruiting of the plant, the idea, is civilization itself) is recklessly anti-religious and secular and ‘free’. The Day-Cycle finds its resource in human and divine Will, and its activity in positive electrical currency.

The Night-Cycle is black. The Night-Cycle seeding (the seeding of the plant, the idea, happens in the darkest part of the year, in the womb of Nature, for gestation cannot occur except in Darkness) is recklessly fundamentalist and religious and occurs in the valley of the shadow of Death. The Night-Cycle finds its resource in human and divine Love, and finds its activity (or non-activity) in negative electrical currency.

These attacks in 2001 on landmarks of the American empire symbolically marked the end of the 18-year economic expansion of Western Civilization (with its ideal of the ‘individual’ and the triumph of ‘private’ enterprise) that began with Ronald Reagan’s counter-attacking capitalist revolution in 1983.

Day-Cycles exemplify ‘private enterprise’, and focus on private gain, individual activity, individual destiny: personal and cultural and national empires are then built. Night-Cycles have a social conscience; Day-Cycles do not.

Day-Cycles honor ‘development’, accumulation, practical intelligence, achievement, and problem-solving. Night-Cycles honor decency, generosity, beauty, wisdom, grace.

Night-Cycle: 1965-1983; Day-Cycle: 1983-2001

The period of 1983-2001 marked the 18-year period of economic expansion that followed the 18 year period of economic stagflation or Night-Cycle, 1965-1983, during which era America endured both high unemployment and high inflation, a flat investment market on Wall Street, and the spiritual death experience that characterizes Night-Cycles: the anti-patriarchal Counter-Culture and feminist movements, the anti-white civil rights rebellion – the poor rising up against the rich -- the ‘lost’ war in Vietnam and the general anti-capitalist flavor of this period – Night-Cycles are anti-materialistic in nature and anti-capitalist in spirit and in doctrine -- cast rocks at the sins of America’s history, exposing racial atrocity, economic bullying, and militaristic terrorism in Asia and Latin America. Clearly, this period produced the deflation of the American Ego (the self-image of the Conquering Hero) – self-accusation, social fragmentation and polarization, civil disaffection and even armed conflict against the white, male power structure.

Day-Cycles are times of action; Night-Cycles are times of judgment, and especially, self-judgment. Night=Cycles see only the negative aspect, the shadow aspect, of the Day-Cycles. Hence, the hatred of their opposite grows as their sense of being abused and victimized increases.

From 1965-1983, communism nearly won, winning in Vietnam, Cambodia, Laos, Nicaragua; nearly winning in El Salvador and Honduras; making deep inroads into the hearts and minds of ‘guilty’ white culture in Europe, America, England, and Australia. Drug use increased in white cultures (as white cultures turned black); hippie movements, ‘back to Nature’ movements, ‘make love not war’ movements proliferated. Men grew their hair long and idealized the female nature. Massive demonstrations against the ‘establishment’ – the white patriarchal leadership cult – shook Western Civilization. Political power swung to the Labor Party in many Western countries, including America, who went with Democratic leadership or, in Nixon, moderate ‘pragmatic’ Republican leadership – fundamentalist pro-business ideology was exile on the far-right fringe of the Republican Party. In a similar way, the Republicans dominated the Day-Cycle, 1983-2001, with only Bill Clinton, this era’s Nixon, serving as the leader of a Demoratic presidency – but Clinton was a ‘new’ Democrat, ‘pragmatic’, a friend of business, a friend of Wall Street.

The Day-Cycle is about the rich oppressing the poor through the powers of a racial(ist) fundamental religiousness – the Light casting the Darkness out of Heaven, easily interpreted, with many such historical precedents, as the dark-skinned races being cast out of heaven by the light-skinned races -- married to economic empiricism and Darwinian morality married to subtle processes of self-adoration (that is, inflation of the Ego-Bubble, both ‘inflation’ and ‘bubble’ being especially illuminating words considering our context). The Hero-as-Conqueror is the master figure of the Day-Cycle. The Knight protecting the Woman threatened by Darkness, and building the City for her, the House, the Bank Account, the Militiary Force to keep poverty, Darkness, and Death at a distance. He builds the wall for her, keeping invaders and intruders on the outside.

The Night-Cycle, in contrast, is about the poor getting even with the rich. No wonder Misters Greenspan and Bernanke are desperate to keep the Ego Bubble inflalted. They thrive during the Day-Cycles; and they are considered immoral outlaws during the Night-Cycles.

The Day has no Soul. The Night has no Body. The Day and the Night, like Matter and Anti-Matter, approach one another (at Dawn and at Dusk), annihilate one another, and exchange positons: the High becme Low; the Low become High.

The Night gets a Body suddenly and becomes ‘cleansed”, rising up in to Heaven; the Day gets a Soul and becomes ‘black’, aware suddenly of its own sins committed when it had no Soul.

The Earth (the Dark Woman) loves and gives herself to the Purified “White” Man, – opposites always attract. The Moon (the White Woman) loves and gives herself to the Dark, Corrupt Man – the Negative Man – who turns his back on the Human Life, returns to Nature seeking to be purified, cleansed, finds his way in the Dark by the light of the Moon (the love of the woman he cannot marry) who watches over him from a distance.

I realize this may seem to be nonsensical to the reader who has lost undertanding of the symbolic language. The Day-Cycle, scientific logic, does not speak the language of the Night-Cycle, poetic symbolism and metaphor. The Day-Cycle is blind during the Night; and the Night-Cycle is blind during the Day. This book will attempt to re-instruct the Modern reader in the principles of the symbolic language, to enable him or her access to the ancient wisdom hidden in the glyphs of metaphorical thinking.

Metaphor is, in some sense, non-sense, in that it relies on intuition and inspiration – the breath of the gods – to enlighten the mind. The Day-Cycle tends to use the mind as an adding-machine, taking information in from the senses, running the data through the machine, the mind, generating, through this sensate process, a picture of what reality is. The mind crunches reality, as the adding machine crunches numbers.

The Night-Cycle tends to use the mind directly as an organ of perception. The mind sees the world directly, without the intercession of the senses: using the mind as a Third Eye, which looks directly at the world, at the world’s ‘mental principles’, by-passing the senses, and, thus, becoming ‘non-sense’, as the dream is non-sense – however the dream in not without meaning, not without structure.

I will show, through my own experience, the meaning of the Two Woman who guide men, who stand one at the Gate of Heaven and the other at the Gate of Hell, leading men and cultures and planets sequentially through adventures on Earth, one guiding material evolution, the other guiding spiritual evolution. We will recall, in mythology, that Venus had at least two aspects, one as Morning Star, and one as Evening Star. This idea gives us a clue to the meaning of our Two Women who guides the man in his life.

Looking at the diagram below, we see that Venus, the Goddess of Love, is stationed at two points on the Time-Wheel, once at Autumn, at Dusk, in the sign of Libra, the balance – Venus, the Evening Star -- and also in the Spring, in the sign of Taurus, the Bull – Venus, the Morning Star. This symbolism suggests what I will analyze more fully in this book, and explain by using my own life experience.

God “Breathes” Life in to Man: Day-Cycle.

God “Breathes” Life out of Man: Night-Cycle, Stealing Away Man’s Power to Control Events.

Most religious literature speaks of the deities’ Breath, the creative gods as being the Winds, the Holy Ghost breathing fire in to the souls of those chosen to be disciples of the Unseen Truth. The gods breathe forth the created world and then breathe in the world of form at the end of Time, essentially deconstructing what they have earlier built. The literature rarely speaks of exact time cycles, but speaks more mystically about numbers. In the context of our Time-Wheel, the out-breathing cycle, the creation of the World of Form, is our Day-Cycle; and the In-Breathing cycle, which destroys the forms it has created, the reign of the gods of anti-matter (Shiva in Hinduism) is our Night-Cycle. Language is instructive: another word for Out-Breathing is Expiration; another world for In-Breathing is Inspiration. The mortal world is breathed-out; the mortal world is light and matter (we must remember than physical light is matter). I have stated earlier that Night-Cycles are vital, because Night-Cycles give us dreams, the same dreams we will attempt to build in matter when the following Day-Ccyle begins.

God speaks to Hammurabi, Moses, Plato during Night-cycles, giving man ‘laws’ to bring back with him from the mountain-top. These ‘laws’ are, of course, ‘Laws of Nature’ –the Material World evolves; and the Spiritual World evolves – although when one watch the fundamentalists who clint to a literl intepretation of a metaphorical doctrine, one wonders if evolution is just an illusion. Honor killing, creationism, and other forms of fanatic literalism deservedly give religion a bad name.

God did NOT build the world in six days. ‘Six Days’ is a metaphor. The Lord (Elohim) created the world in six days; and on the seventh day He (they) rested – that is, the ‘builders’ created the world during the “Day-Cycle”, and then came the ‘Night-Cycle”.

Man meets God face-to-face during Night-Cycles on Mount Sinai, Mount Meru, Olympus, Mount Telemachus, The Mountain is the spex of the Nature-Worship, the Night-Cycle.

There are two mountains, in fact. One is the reflection of the other mountain. Reflections exist in Water. Which moutain is the real mountain? And are both mountains illusions? In one mountain disappears, does the other disappear as well? Is it simply a magic show? One illusion existing because the other illusion also exists?

The mountains are also triangles. The two triangles point in opposite directions, leading to apexes in Northern and Southern Hemisphers – in six different directions, as a matter of fact. (think of the Jewish Star of David). An older version of the Star of David exists in Hindu and Buddhist texts, and is called Sat-Kona, the hexagram – a symbol of the union of Day-Cycle and Night-Cycle. This symbol later was considered a talisman of Saturn, on Jehovah, the Old Testament Jewish God.

The idea that Nothingness is the only ‘reality’ – that is, Etern Time before the light created the illusion – is very much a part of Hinduism and Taoism. Everything but the Nothinness – being the Darkness before the Light is born, the profound Unity in the Dark Age, before thought, before sound, before differentiation -- is mortal and, therefore an illusion – is temporary. Nothingnessis Eternal, the seed-bed from which all forms come, and the seed-bed to which all things return.

Like the Dark Matter of the universe, Nothingness is, in fact, Somethingness. We are just not sure what it is. Fullness, perhaps: Fullness before Fullness is breathed out and become differentiated parts only remembering Fullness.

Inspiration comes out of restful repose, out of the act of dreaming during the Night-Cycle. Expiration comes out of activity, out of Day-Cycle energy, which is limited by Time and must be replenished by…rest and respose, and by Inspiration gained from dreaming.

It is interesting to note – and we will examinute this more fully later -- that Mars, the God of War, is also stationed in both the Spring and the Autumn. It is interesting to note in the diagram above that the year 1941 on our Time-Wheel falls in Scorpio which is one of the signs that is ruled by Mars, the War God. Of course, America was attacked by Japan and entered World War II in the year 1941.

Night-Cycles Are About the Dis-Integration of the Current Structure, and the Re-Integration of the Dream For the Sake of the Next Structure

Ego expansion, inflation, requires and assumes a form of social unity, either through a shared sense of danger, or through enforced conformism – Law and Order, which is a prime logic and motivation during the Day-Cycle -- and a jeer at fascist autocracy – police states -- when seen from the perspective of the Night-Cycle. Ego contraction, deflation, and material implosion produces a climate of social division that threatens the government, the dominance of the ruling monied class, and the economic hierarchy of the ruling civilizations: the very fabric of the society is ripped asunder. Riots in Egypt, and throughout the Middle East in early 2011, earlier riots and streek killings in Thailand in early 2010, and worker and student riots in European cities in late 2010 – in Greece – in England, Italy and Germany -- are all identifiers and outcroppings of Night-Cycle class warfare.

This is where we are headed, straight into social division, polarization, between the rich and the poor, between the haves and have-nots, anger at the government and their masters in the Ruling Class (mostly white, mostly men), perhaps revolution.

This disintegration will continue until around 2019, at which point the potent negative energy of the deflation period (‘emptying out’) – seeing the shadow-side of the Day-Cycle instead of the light-side -- will begin, slowly at first, to give way to the more positive energy of the inflation experience (‘filling up’), which inflation will gain majority control in 2028, and will culminate in 1937 in another banking crisis, another corruption scandal, and another nascent economic depression that authorities again, unless we change our thinking, try to ignore, try to defeat throught expanding credit (instead of contracting credit), making deflation the enemy instead of the savior of the bursting bubble of another economic bubble expansion.

We Need A New Economic Definition of “Inflation”: Inflaltion is Economic Growth

Note: I use the word ‘inflation’ interchangeably with the words and concepts of ‘growth’ and ‘expansion’. In my mind, ‘economic growth’ is ‘inflation’. Most ecnomists will dismiss this interpretation, instead referring to inflation as some phenomenon connected with increasing money supply, or increasing costs of doing business and consumer prices and incomes, which they might even claim is measured (and even claim accurately of such measurements?) by two government gauges: the Consumer Price Index (CPI) and the Producer Price Index (PPI).

I suggest we think differently about inflation. In one studies various types of ‘inflation’ during the last Day-Cycle, 1983-2001, as an example, one will find that the Day-Cycle expansion always includes a massive amount to price inflation, cost inflation, and expansion of the money supply. Salaries did not inflate much, in fact, during this period, and we will try to explain why this happened or didn’t happen later in the book.

Growth is inflation – but growth is ‘good’ inflation. Growth, ‘good’ inflation, is the filling up of the empty glass. ‘Bad’ inflation is caused by attempts to overfill the full glass, which happened, also, from 1965-1983, until Paul Volcker put an end to it in the early 1980’s, by raising the Fed Funds interest rate to more than 20% to dry out the system (rates should have been raised slowly and steadily from 1965-1983). Bubble-creation – the very thing Alan Greenspan did in 2001-2004 – and what Ben Bernanke is doing now – is the ‘bad’ inflation we desperately need to avoid.

‘Bad’ inflation is caused by leaders devoid of philosophy who are driven by fear or greed or both (greed is fear of poverty, is it not?), and attempt to use monetary policy to avoid the natural and necessary Night-Cycle deflations, which leaders (my own euphemish, in fact) attempt to keep the party (and the addiction to debt) going for ever, in a cancerous preoccupation – a behavior that will eventually destroy America -- as inflation destroyed the Roman Empire. We need to come to some philosophical understanding that both periods of growth and periods of rest are required, periods of inflation and periods of deflation, followed by periods of re-inflation. Rebirth is a given. We cannot let our fear of death drive us to make policy decisions that ruin our currency and shackle our grandchildren with mountains of debts – the Night-Cycle is the time to elminate debt and accumulate savings, not the time to be taking on more debt.

Life is a breathing process. Governments need to understand this breathing process. The public needs to understand this breathing process (metaphor) as the ultimate rational answer to the ebb and flow of economic realities and historical events. Devotion to the Will (and Power) alone is not enough. Devotion to ‘development’ (what a strange euphemism), to building, expanding, conquering, city-building is also not enough. We need to be equally devoted to both sides of our nature: the masculine, conquering Will, and the feminine receding, Love aspect, which in its highest form is Wisdom. No farmer plants his field every day of the year, demanding a constant return on his property. Nature is not a factory, working all day and all night, every day of the year. Nature has a planting time, a flowering time, a growth season, a fruiting season, a harvesting time, and a fallow period, a time when the Earth rests, when seeds germinate, getting ready for the next growth cycle.

Farmers (in Nature) understand philosophy more than businessmen (in the City) do. Farmers understand the cycles of the Earth – and the philosophy that grows up out of these cycles. Most businessmen understand growth, growth, growth: growth in markets, growth in profits, growth in technologies to cut costs (and require fewer workers). We cannot give political power over to our businessmen unless we want to be destroyed by this perpetual growth philosophy. It is cancerous. Profits are not the only valuable principle in life. Life requires balance. The perpetual growth principle is the picture of low-quality suburban strawl, golf courses, and mini-malls spreading everywhere, taking over all of Nature.

One thing man must always remember. Nature, ultimately, wins. Things that rise also fall, no matter what you do, no matter how much denial you can achieve, how much temporal power and how much money you have: Nature will not be defeated.

American Historical Day-Cycles and Night-Cycles

We will examine these American historical Day- and Night-Cycles carefully in the first part of this book.

Period A. 2001 – 2019: Night Cycle Deflation, Social Fragmentation, Chaos

Period B. 1983 – 2001: Day Cycle Inflation, Higher forms of Organization

Period C. 1965 – 1983: Night Cycle Deflation, Social Fragmentation, Chaos

Period D. 1947 – 1965: Day Cycle Inflation, higher forms of Organization

Period E. 1929 – 1947: Night Cycle Deflation, Social Fragmentation, Chaos

Period F. 1911 – 1929: Day Cycle Inflation, higher forms of Organization

Period G. 1893 – 1911: Night Cycle Deflation, Social Fragmentation, Chaos

Period H. 1875 – 1893: Day Cycle Inflation, higher forms of Organization

Period I. 1857 – 1875: Night Cycle Deflation, Social Fragmentation, Chaos

Period J. 1839 – 1857: Day Cycle Inflation, higher forms of Organization

Period K. 1821 – 1839: Night Cycle Deflation, Social Fragmentation, Chaos

Period L. 1803 – 1821: Day Cycle Inflation, higher forms of Organization

Period M. 1785 – 1803: Night Cycle Deflation, Social Fragmentation, Chaos

Period N. 1767 – 1785: Day Cycle Inflation, higher forms of Organization

Period O. 1749 – 1767: Night Cycle Deflation, Social Fragmentation, Chaos

Period P. 1731 – 1749: Day Cycle Inflation, higher forms of Organization

Period Q. 1713 – 1731: Night Cycle Deflation, Social Fragmentation, Chaos

A reader with even a simple understanding of American history will see that the periods of deflation, outlined above, do include periods of substantial social fragmentation, polarization and chaos, civil war, periods of class warfare and periods of economic dislocation and depression.

Periods of inflation (economic-growth inflation, not necessarily monetary inflation) include a return to national roots, a baptism, a washing clean of the sins of the past (a drinking from the River Lethe in the sense of the Greek Myth, a suspension of accusatory Memory and self-hatred), often a threat to national security, a covenant given by God santctifying the expansion, and the resurrection of the Father-Figure image – a re-unification or atonement of the Father and the Prodigal Son – the ‘romantic’ son who has opposed the Father and the Father’s order and creation -- and a re-awakening of religious imagery, embedded in symbols of Old Testament ‘chosen’ people imagery. We will look at all of this in much more detail as we progress thorugh the book.

There is always a Promised Land given, through covenant, to the re-born Son (Sun Hero, Fertility God). There is always a wife given to the Renaissance Man (as there is always a love given to the Romantic Man who is falling on the other side of the globe, a love that does not result in marriage or offspring: the Sun and the Earth marry; the Sun and the Moon do not marry – the Sun and the Moon spend, in fact, very little time together, but engage in a terrific love-affair – this fact being the basis of the ‘virgin’ mother mythology – which we will also examine). With a wife comes money, power, property (the Promised Land) and a form of empire, a form of the Garden of Eden. With the loss of a wife – a lost love, a broken heart – comes poverty, obscurity, and a form of negative empire: self-hate, self-judgment, and sometimes civil war.

Day-Cycle Hero: the Cowboy. Night-Cycle Anti-Hero: the Indian.

Put in a local, American national cultural vernacular, Ego-deflation Night-Cycles empower the Indian persona from American history. Ego-inflation Day-Cycles empower the Cowboy persona from American history. The ‘Indian’ is tribal (group-oriented), lunar, horizontal in orientation – animated mentally and culturally by the imagistic dream content – and by the ethic of equality. The ‘Cowboy’ is individualistic, solar, vertical in orientation – climbing the ladder in search of objective recognition and material rewards – animated by the scientific ‘real world’ of causality and engineering, city-building, active god-like behavior, and by the ethic of freedom, bringing law and order to the wind-swept town, teetering on the brink of devastation at the hands of criminal darkness.

It is this active, god-like behavior – pride, or the Greek idea of hubris – that causes Adam (and Eve) to fall from the pure state of Paradise and to be cast into darkness (death, illness, decline, depression), which is the essence of the Night-Cycle of Ego Deflation, as the human being suddenly awakens to his own limitations, his own mortality, his own inability to stem the tide of the collapse through the old Cowboy logic of hard work, will power, and positive thinking – that is, of exclusion of the shadow, the negative energy, from the picture, creating the illusion of unity, a unity of parts. Positive energy is not what fuels the expansion, it is the expansion that fuels positive energy. Positive energy does not work to stem the contraction.

Day-Cycles, being about Man’s Glory, are about technology, about the Machine Glory, about Man’s Creation. Night-Cycles are about God’s Glory, are about the failure of Man’s Glory, through Man’s machine-creation.

(Another symbolic event in February 2011 was the failure of a NASA launch (powered by a Taurus rocket) of the satellite ‘Glory’, designed to study Solar and atmospheric influences on the Earth. Glory fell back to earth, fell back in to the sea in fact. This occurred a few days before Japan was hit by an 8.9 strength earthquake, which triggered a huge, 23-foot tsunami off Japan’s northeast coast, flooding and destroying the whole of Japan’s upper coastline, damaging a series of Japanese nuclear reactors that several of which subsequently suffered meltdown. Many Japanese (in the millions) were left dead, or homeless, or without power. Both of these events are symbolic of Nature’s Night-Cycle domination of Man, and the failure of Man’s machines. Nuclear power-plants provide Japan with 33% of its electrical energy. At least three Japanese nuclear powerplants have been flooded with sea-water, meaning they will never be used again.)

The Day-Cycle is about Man’s glory through the powers of scientific thought. The Night-cycle is about God’s glory thorugh the powers of religious or metaphorical thought. The ferment and yeasty-rising of the Arab World indicates that it is Dawn to their religious season – they are waking again. The West – the Scientific Mind – is growing tired, is not able to control events now, and in sinking in to sleep. It is Dusk in the world of the Western Mind.

Day falters; the Future vanishes. The eyes – physical Vision – go out – that is, gets weaker and more limited, the field of vision shrinking back toward the local point, the nucleus, the center: this is the Big Crunch. Of course, the point of light during the Night-Cycle is the Moon, reflective light concentrated within itself.

The man, the nation, the culture, loses momentum, is pulled by gravity back toward Earth, turns back and falls, discovering, as he falls, the power of reflection, and, as well, ghosts from his Past – also taught the lesson that Nature is stronger than Man is during the Night-Cycles. The Past comes in to view. Day-Cycle transforms into Night-Cycle; the Future transforms into the Past. And debt – always associated with Kramic Debt (‘I will do anything to get ahead’) – comes to be recognized as being a problem, even a moral problem. Sin appears: the sins one commits to fulfill his private dreams.

Pubic spending won’t fix this decline; manic spending (and borrowing) by the Federal Reserve can’t re-ignite the expansion; engineers can’t curb the collapse; politicians can’t talk or cheer their way out of the reality of the contraction. There whill be no magic WDN (“Whip Deflation Now”) buttons to be worn to fix the depression. Nothing but time (a full 18 years, in fact) can resurrect the dead power-source and inflate the ideals of civilization again.

Day-Cycle Erections, Followed by Night-Cycle Pregnancies and Contractions

I wrote earlier that Day-Cycles were periods of ‘erection’ and I meant that in the meaning of both periods of building and construction and in periods of masculine sexual energy –fertility -- which drives cycles of daylight expansion. Male sexual energy – the erection – is the positive energy – the magic wand – Number 1 as a digit and also as a form of the king and the king’s unit(y) -- that drives the Darkness away and brings fertility and growth back to the culture and to the Earth. Night-Cycles manifest the Romantic Man, who is a failed lover, who becomes a philosopher, a saint, a poet, a monk, and as ascetic who embraces celibacy, turning his back on the woman, considering her the cause ofthe corruption of his own Soul, the cause of his sin, and who refuse to vitalize the Earth sexually, refuse to give his life-energy to the woman. The land grows fallow.

Self-sufficiency becomes the national creed of the Night-Cycle. Taking care of oneself. Saving; not spending. Saving energy; not spending energy. Currency is the blood-stream of the nation; it is put in the bank; it does not circulate.

One of the most interesting symbols to appear at the end of the most recent Day-Cycle (ending in 2001) was the advent of Viagra, a medicine to enhance and toextend male sexual potency – which was a kind of desperate denial of natural cycles and age in the human life-cycle – a kind of ‘extend and pretend’ medicinal version of Bernanke’s monetary policy.

Viagra is an attempt to deny Nature; in the very same way, Greenspan, first, and then Bernanke, sought to provide the global economy with a financial panacea, cheap debt, loose credit, which was also a form of Viagra, an attempt to ‘extend’ the weakening masculine Day-Cycle and ‘pretend’ Nature did not matter. Nature being the woman, in this case, the Dark Principle, the Moon.

I have written that these ideas are ‘not my own’ but are the inheritance of humanity on Earth, and have been examined by every human culture and every religious thinker or philosopher since the beginning of time. The struggle of the Light and the Darkness is the oldest drama in the world, and the theme of every underlying literary or philosophical masterpiece since time began.

In this book, I will look more closely at the 18-year cycle as it fits a 4-season cycle as a paradigm of historical development, a schema that owes something to the influence of both Gambatitsta Vico and Oswald Spengler.

I have also been influenced in my thinking and in the writing of this book by James Joyce (especially Finnegans Wake), Dante, Herman Melville and Marsilio Ficino, all Medieval personalities and thinkers. The Medieval personality (and I define the Medieval periods as being the two ‘interludes” between both Day-Cycles and Night-Cycles, the gates between the two transitions: Spring and Autumn. Many Western historians like to place the Middle Ages somehow attached, often as a negative addendum, to the Dark Ages, more closely related to the Goths than to Michaelangelo and DaVinci. My conception is that the first of two Medieval Ages is the point of transition from Darkness to Light and is symbolized by the Renaissance Man, he who is still religious but who is journeying toward the Daylight, away from the Night, journeying away from God toward Man (and toward Man, who, in his culmination. Acts, himself, as a god). The Renaissance Man (Medieval Positive – positive toward Man and toward the idea of civilizing Nature) is whole, containing both Darkness and Light in his understanding. He is Religious, Scientific and Philsoophical. As he journeys in to the Light he loses this wholeness, this balance.

Romantic Man, who occupies the Dusk/Autumn point on the Time Wheel, represents the second Medieval Age in the Round (in my mind): Medieval Negative --.negative toward Man and toward the ideas of civilizing Nature The Romantic Man is also whole, but he is journeying away from the Ligth, away from Man’s Glory, away from the City, back towards Nature. He will also lose his wholeness, his balance, as he descends.

The Renaissance Man (Medieval One) is the First Man, Adam, the Hero, if you will; and Romantic Man (Medieval Two) is the Last Man, the Seventh Man, anti-Adam, the Anti-Hero.

Hinduism posits Seven Men, Seven Races, Seven Rounds (similar to Days in the Week) that all make up a Week of Brahma. Each Day has a Night that is equally long as the Day; each Week has a Night (a pralaya) that is qually long as the Day was.

We will look at these ideas more deeply later.

Who is Marsilio Ficino, and What Is Divine Madness?

I will look at Marsilio Ficino’s work most carefully. Ficino, although not writing directly about Day-Cycles and Night-Cycles (those ideas I most directly link to ancient Hindu and Buddhist thought, Jewish and Christian esoteric writing, Chinese philosophy), wrote extensively about the personas one takes on while sinking into depression, while sinking into a Night-Cycle. Ficino (many of his ideas are linked to Plato’s ideas of the ‘necessary madness’ and the ‘four frenzies’ one meets and becomes during depression, or travel in to the Underworld) – during the Night-Cycle, a culture descends in to the mythological underworld – the same underworld through which the Egyptian god Osiris traveled in order to find rebirth as his son Horus.

Plato, and after him, Ficiono, wrote how the ‘Four Frenzies’ use us to transcend ego concerns and materialistic unconsciousness, and that these frenzies constellate around four symbols, personas, masks, or archetypes: poet, priest, prophet and lover.

I have suggested that Night-Cycles are, indeed, periods of ‘necessary madness’, agreeing with Plato and Ficino. I have talked about rest, and germination, and dreaming the next reality, and the poor chastising the selfish rich, and the need to give the Earth a period of rest, so that all the greedy ‘developers’ and ‘risk-takers’ don’t turn the entire planet into one continuous retirement community with country club, shopping center mall and housing development, all for the sake of more and more money in their bank accounts.

Night-Cycles exist and are precious aand ned to be understood and respected because Night-Cycles manifest, evolve and emphasize Soul in the Human Kingdom.

Paraphrasing Plato and Ficino: The Four Frenzies, the Four Archetypes, embedded in the Darkness, when constellated within us help to provide a focus for the ‘necessary madness’ required for the development of the Soul. In other words, the developing Soul will be taken over by poetic, religious, prophetic and erotic frenzies as a way to achieve unification and wholeness.

During the previous Night-Cycle in America, Night-Cycle in the sense of Dusk-to-Dawn Horizontal Night-Cycle, which ran from 1974-1992, I fell madly in love (1976-78) – see Venus on the time Time-Wheel diagram – with a married woman (Venus, the Evening Star; Moon Figure). This love did not last. This sent me into exile, leaving my home in Wyoming and traveling to Oregon, where I began a new life, expecting, in fact, my love to join me there, when her marriage failed. The marriage did not fail. My father died in 1980. This was the deepest depression I had ever experienced in my life, up to that time. To survive this depression, I wrote a major novel which became, in effect, a kind of life-raft to me. I did not understand the concept of cultural Day- and Night-Cycles at the time. The novel was titled Conversations On A Dying Age – subtitled Aemrican Book of the Dead. This book chronicles, in fictional form, my own descent into Death, into the Underworld – clearly the Figures of Mad Lover, Made Poet, Mad Prophet and Mad Priest possessed me in this underworld – and are clearly present as personas in this novel.

My own view of the sequence of the constellations of these personals is not the same as Ficino’s. I see the stages as : Mad Lover, Mad Poet, Mad Prophet, Mad Priest, Mad Prophet, Mad Poet, and Mad Lover – the first Mad Lover being the Romantic as he begins his descent into the Water, into the Underworld – the failed love, the Sun loving the Moon – the second Mad Love being in place to enable the Soul’s magical escape from the Underworld, the mystical marriage of Sun and Earth, the love that is sanctified by God, granted by covenant, which leads directly into the Gardent of Eden, the Golden Age, or Spring of the Day-Cycle.

In truth, all of my writings illuminate times and themse of the Time-Cycle – and I will quote extensively from my own unpublished writing to describe time-experiences and show how they fit in to the seasons of the Time-Wheel.

This image below represents a visual system of History’s stages – and applies to 18-year cycles and to historical life cycles in a more general sense.

History begins in a love of God, then transforms into a love of the world (of men), then returns to a love of God is three major steps, through four major personas or guardians – personas not to be confused with the Four Frenzies defined by Plato and Ficino. Black Giant (Nature, Dark Ages, Space: Midnight) – an aspect of Plato/Ficino’s Mad Priest; Renaissance Man (First Middle Ages, Dawn); White Giant (Man, Empiricism, Time, Noon); Revolutionary Romantic Man (Second Middle Ages, Dusk).

This process will be examined quite thoroughly in the book that follows.

The Metaphysical Compass and Navigating the Night-Cycle

I intend for this book to become a compass to help readers find their way through the coming (the existing) Dark Age – D’Ark Age, for there are small Dark Ages, Large Dark Ages, and Very Large Dark Ages, each one being defined, in an elementary sense, by the Flood – the overfilling of the full glass – and also for policy-makers (and, if America decides to keep the Federal Reserve Bank, Fed officers as well) to begin rationally planning through monetary, social services and tax policy for orderly and inevitable cycles of both expansion and contraction. It does not pay to deny the inevitability of the Darkness, to fight the decline, to resist it, when, through understanding it, we can use it as preparatory ground for the inevitable next rebirth, which always follows ‘contractions’.

The word ‘contractions’, of course, suggests a cold shrinking of substance and also the feminine experience that comes as a sign of impending (re-)birth.

As I have insinutated: during every Night-Cycle, religion comes alive: the epochs and epics of the Old Testament and, to a lesser extent, New Testament, are not only descriptions of (idealizations of) Jewish history, they are also a description of the living structure of mystic Nature.

The Flood (Noah was Vaivasvata Manu in early Hindu myth), the Covenant, the Promised Land, the Chosen People designation, David and Goliath, Moses on Mount Sinai, the Guardian Angel Michael casting Satan out of Heaven, Saturn casting Adam and Eve out of the Garden of Eden, sending them into exile – exile, captivity and return – the trials of Job – Jonah’s experience of Death and of mystical Initiation inside of the whale, the Valkyries in Norse mythology…these are all glyphs representing real events lived in the inner, more subtle world of anti-matter, all experiences of Modern Man, today, in 2011 – or, at least 1974-1983. I will explain what I mean by this later in the book.

Relious writing is not really a description of the Past; it is a description of the Eternal Moment, Eternal Time: Time not broken up into trinitary segments of Past, Present and Future, but Time as an ever-present continuum, a web, connection by obscure, esoteric geometry.

The Patriarchs are not dead heroes living in a distant past, but they are alive inside of us; and we live in the same structure that the historical patriarchs did, and the prophets, who predicted and sought the demise of the patriarchal authority now grown corrupt when the Night-Cycle elements illuminate this corruption (as the Low Tide illuminates junk borne by the ocean).

Joseph Interprets Pharaoh’s Dream as the Day-Cycle Followed by the Night-Cycle

Of course, Joseph in Egypt and his interpretation of Pharaoh’s dream is another eternal-entity we should not forget.

Then Pharaoh said to Joseph: “Behold, in my dream I stood on the bank of the river. Suddenly seven cows came up out of the river, fine looking and fat; and they fed in the meadow. Then behold, seven other cows came up after them, poor and very ugly and gaunt, such ugliness as I have never seen in all the land of Egypt. And the gaunt and ugly cows ate up the first seven, the fat cows. When they had eaten them up, no one would have known that they had eaten them, for they were just as ugly as at the beginning. So I awoke. Also I saw in my dream, and suddenly seven heads came up on one stalk, full and good. Then behold, seven heads, withered, thin, and blighted by the east wind, sprang up after them. And the thin heads devoured the seven good heads. So I told this to the magicians, but there was no one who could explain it to me.”

Then Joseph said to Pharaoh, “The dreams of Pharaoh are one; God has shown Pharaoh what He is about to do: The seven good cows are seven years, and the seven good heads are seven years; the dreams are one. And the seven thin and ugly cows which came up after them are seven years, and the seven empty heads blighted by the east wind are seven years of famine. This is the thing which I have spoken to Pharaoh. God has shown Pharaoh what He is about to do. Indeed seven years of great plenty will come throughout all the land of Egypt; but after them seven years of famine will arise, and all the plenty will be forgotten in the land of Egypt; and the famine will deplete the land. So the plenty will not be known in the land because of the famine following, for it will be very severe. And the dream was repeated to Pharaoh twice because the thing is established by God, and God will shortly bring it to pass.”

There are few descriptions in all of literature that so clearly define the Day-Cycle/Night-Cycle time sequence as this passage does. 7 years of Day-Cycle prosperity and expansion; followed (always) by 7 years of Night-Cycle poverty, contraction, and despair. Our numbers differ, but not much else.

During times of plenty, during the Day-Cycles, a culture, through its government, should store up wealth for the inevitable Night-Cycles that follow. These cycles come like clock-work. America can no longer continue to deceived herself about ‘happy days are (always) here again’ – pretending that thinking only postive thoughts and allowing businessmen run the world will save us from the apocalypse. Businessmen ran the world off the cliff in 2008.

Happy thoughts make for happy Hollywood movies – which is another topic of conversation – but rational planning for the ebb and flow of Nature’s ‘giving’ and ‘taking away’ makes more sense as a response that attempts to anticipate and work-with (and not against) reality. We may not like the fact that Night-Cycles are inevitable – we my not like Winter – but not liking this fact is not the same as elinating it.

This book is intended to be a Joseph’s-dream-analogue for America and for the rest of the world .

There is a time for entrepreneurial capitalism and increasing capital-gaps between rich and poor (Day-Cycle) and there is a time for social-centered group responsibility (socialism, if you wish – I am not afraid of the word) and a shrinking of the gap between rich and poor (Night-Cycle). It is not either Capitalism or Socialism – it is both Capitalism and Socialism in rational sequences.

Honor thy Father in Heaven (the Day-Cycle); but also honor thy Mother on Earth (the Night-Cycle).

Day-Cycles are about Mana’s glory, Man’s triumph, Man’s machinery, and Man’s pride.

Night-Cycles are about Nature’s wrath, viewed by ancient cultures as God’s wrath; and about Nature’s de-construciton of Man’s glories. This means economic disintegration, wars, civil wars, social revolt; this means floods and tsunamis, droughts, earthquakes, volcanic eruptions, as Earth attempts’ to shake off the cancer cells that are threatening to destroy her.

The revolt that is spreading throughout the entire Arab world is clear evidence of the human social earthquake occurring on the Earth. One thinks of Katrina, the devastating hurricane and flood that destroyed New Orleans in 2005; one can view the major floods all over Earth in 2010 and 2011, including major destructions in Pakistan, South Africa, and in northeast Australia; and when one sees the earthquake in New Zealand, February 2011, the devastation of Christchuirch – think symbolically of this name – and the collapse of the spire of the Christchurch Cathedral: Christ’s Church is under attack, is being destroyed. The spire is a phallic form and is the keeper of the time – the bell tower.

Of course, this all began, as I have suggested in 2001 with the destruction of the Twin Towers.

If it seems like the white race is under attack from the forces of Nature, then one might wonder why this is so.

The Day persecutes the Darkness; the Darkness seeks to get even with the Day.

Who Am I and Why Am I Writing A Book about Economics?

Do I have a Ph.D. in Economics?

This book is an examination of metaphysical principles underlying historical manifestations that occur regularly, repeatedly in Nature. I am not an economist. I am a philosopher, a poet, and a student of history. This book is my attempt to demonsntrate how metaphysical and philosophical underpinnings move economic and social realities wich are the effects of the metaphysical causes.

I do not have a Ph.D in economics. I am not a specialist in a single, narrow discipline. I am a generalist with a hunger to put all the broken pieces of knowledge (the glory of specialization) back together again into a picture of the unity of Nature (reassembling the broken pieces of narrow, deep, isolated specialist knowledge).

In the beginning the world was one. Then it was broken into many pieces. In the end, the world again becomes one.

“Most of the negatives in housing are probably

behind us. It's taking less out of the economy."

Alan Greenspan, 2006

TURN OUT THE LIGHTS:

THE TWILIGHT’S MOST RECENT GLEAMING

Everybody knows that the dice are loaded

Everybody rolls with their fingers crossed

Everybody knows that the war is over

Everybody knows the good guys lost

Everybody knows the fight was fixed

The poor stay poor, the rich get rich

That's how it goes

Everybody knows .

Everybody knows that the boat is leaking

Everybody knows that the captain lied

Everybody got this broken feeling

Like their father or their dog just died…

“Everybody Knows”Leonard Cohen

PART ONE. THE MACROCOSM:

DAYLIGHT FALLS.

A SIP FROM THE CUP OF PHILOSOPHY – AND THE READING OF THE INDICTMENT

CHAPTER I.

AS THE WORLD TURNS…DOWN.

Alchemy is Really A PICTURE OF the Soul’s Potential For Rebirth.

In April 2008, I retired after working thirty years as an administrative assistant in the Architecture Department at the University of Oregon.

Almost immediately, upon retiring, my vision of the future turned black. I was standing before an abyss. True, my life patterns, thirty years in the creation and preservation of a ritual, had ended – and I was undergoing a kind of psychic death. Shiva, the God of Destruction, had suddenly appeared.

But there was more than this. The precipice at which I was standing was a cultural, racial gulf. The world we had known so well – which we had taken for granted and assumed would continue into the foreseeable future – was ending. And right on time, if one was to believe the Millennial dogmas.

In Jungian psychological literature, when interpreting the ‘inner’ meaning of medieval alchemy, this period is called the ‘black sun’, Sol negro, and indicates the beginning of the soul’s descent into the underworld, the sun’s descent into death and darkness, prior to eventual rebirth on the other side of the Night. The Soul descends into the ‘ocean of the unconscious’ and undergoes a death and purification ritual, washing itself clean of sins, facing its judgments against its own impurities and failiings (and against its family’s and culture’s sins as well) – and, then, enters a period of dormancy, beomes a ‘seed’ lying latent in the cold earth – to be awakened with a new vision-- this new vision being the new ‘body’ promised in Christian literature, and a new personal mission -- only when stirred to life by the warm rays of the clean, idealistic, regenerated, Spring Sun.

Understood spiritually or psychologically, alchemy was the story of the individual’s quest to attain rebirth from a moral death, a popped Ego-Bubble, that occurs at the end of a Day-Cycle of active external social living – i.e., a Day of material growth, expansion, acquisition and attempted personal achievement.

What happened, speaking metaphorically, to myself personally, and to the American Dream, was simply: Time ran out.

The vas, the container inside of which the alchemist tried to transform hard metals, lead for instance, into gold, was the individual Soul itself, a cup, a glass, sometimes full, sometimes empty, inside of which the now newly-isolate human being would begin to attempt to transform the heavy night of a leaden density and depression and loss into the new gold of Hope and Direction gained through the New Light achieved through Spring’s Solar regeneration.

When the Day turned into Night, the goal ultimately, after the denial, the rage, the mourning, the bargaining (extending and pretending), and, finally, the surrender, was to re-fashion a new body from the remnants of the old – through the process of stripping away the coarse outside material (‘emptying out’ the old, corrupter water in the glass). The physical body weakened and failed; and the spiritual body, the Soul, became the vehicle of this transitory reckoning in the land of Darkness. Despair, Depression, loss of bodily-strength and wealth, were psychic stages in this solar cleansing process, that happense to both individuals and societies.

The Soul did not re-appear until all the more dense natures that veiled the Soul were subtracted.

Day was a process of addition, of adding bodies on top of the primordial Soul, the bodies of Adulthood – Mental, Emotional, Physical bodies – which surrounded Soul to protect it. Night was a process of subtracting these outer bodies again, and returning to the pure state of the Soul, Primordial Nature, the first body with which the child was born into this life.

Apocalypse: All Parts Collapse

It became clear to me, almost as if a light had been suddenly switched off, that the American financial system (and the global economy that America and some of her allies had been championing under the guise of ‘free market capitalism’ for so long) was heading off a precipice. There was nothing we could do to stop it from happening. The world we had known for so long was slowly, irrevocably vanishing, matter being swallowed by a vast black hole that resided in the very center of our economic galaxy. The ‘vast black hole’ was a kind of cosmic vas drinking in light and drinking in matter. Matter was light – we must not forget.

The world was ending.

And ‘positive thinking’, a cheerleading of material markets by its political and intellectual and practical creators and enthusiasts, with their rational, technological ingenuity, which had helped to engender this most recent phase of the Great American Empire’s expansion (and its offspring, the global economic order), would not be able to stem the inevitable turning of Day into Night, the irresistible transformation of Positive into Negative Energy.

This book is about philosophical principles. It is about how the world really works and what really led to the collapse of world capitalism. It is not about financial principles so much. Writers will argue about the financial cause(s) of the collapse for eveer now: the housing bubble, engineered by Alan Greenspan and then nourished by his disciple Ben Bernanke; greed of Wall Street bankers, mortgage brokers and mortgage companies; federal agencies meddling in the pure, wonderful ‘free marketplace’; lack of federal oversight; too much federal oversight. Sophisticated mortgage bonds will be blamed, credit swaps, mortgage insurance. President George Bush will be blamed. American consumers will also be blamed. Also targeted will be the lust for status and credit and consumer goods, which lust had driven the global feeding frenzy – and which had generated personal global wealth on a scale never before seen in human history. Unions will be blamed. The right wing will blame Big Government, as they always do; the left wing will blame Big Business, as they always do.

Yes, there was a good side to this expansion. The good side was probably clear to everyone. Now we will get to see the shadow-side that accrues from a global loss of balance in values and the one-sided misuse of monetary policy.

Business is About Profits and Power, Not About Morality or Human Dignity

In my mind, these ‘financial causes’ are all effects of the expansion rather than cause. The ecstasy of greed creates corruption, theft, misuse of power, many forms of criminality, and desperation; shameful human behavior is often illuminated in much the same way as a low ocean tide reveals garbage, bones, dead bodies, debris, pieces of broken ships, as the water retreats from its raucous and relatively lawless period of high tide, revealing evidence of crimes committed during the raging of the mad period of expansion of the will. Bernie Madoff is not the only criminal who has been exposed by the receding of the water of greed. Wall Street has never behaved more shamefully and with less responsible self-consciousness. A government, if truly interested in prosecuting white-collar crimes, could busy itself for a decade pursuing criminal acts in banking, investment banking, mortgage-abuse, and bribery of government officials that have occurred in the last two decades, but especially the last eight years.

I, personally, do not blame George Bush for the collapse of the western financial system. He cannot control every limb of the American political tree, control every aspect of the unwieldy, voracious, political beast. However, the Republican ideology which has been in power since the advent of Ronald Reagan, which demands that ‘business be allowed to do what it does best’, with less and less government scrutiny, is, without question, responsible for both the creation and the destruction of the booming global economy.

We must remember that what business does best is to generate profits – the shadow side of this profit-generation is the practice of cheating and stealing and manipulating laws and law-makers and damaging living environments in homage to the God of Wealth, and to the underlying ideal of plutocracy. Business seeks to destroy or diminish competition, so that it can raise prices and, where possible, scalp the public for necessary or unnecessary goods and services. Higher profits and lower costs are what make a business successful. This, during the last Day-Cycle included exporting American jobs by the millions to cheap labor markets in Asia and South America, Mexico, in order to break the Power of American Unions.

Business, generally speaking, has much less loyalty to the American worker than it does to its own profits. As profits soar, a company’s stock soars; and as a company’s stock soars, stock options and bonues make company owners and officers rich as Croesus.

In the 1960’s and 1970’s – the poor and lowly gain more power during the Night-Cycle -- organized labor probably gained too much power in America, also becoming corrupt through the assimilation of its leadership with organized crime. Now, labor in America is weak; and the Republicans seem to be on a mission to destroy all remnants of labor unions. This is another imblance that must be addressed in the near-future.

Unions helped to create a strong Middle Class in America, which is the basis of a true democracy. With no middle class, with only Masters (of the Universe) and Servants (wage-earners) America will begin to resemble the banana republics of South America – which, I do believe, is the ultimate goal of Greed. Greed has no conscience. Greed believes in the absolute destruction of its competitors. Who are the competitors of Greed? Everyone. Greed is a totalitarian. Greed knows no real alliances ; and Greed views everyone as a potential enemy.

There was a time not so long ago that capitalism reveled in the free labor offered through slavery, and resisted attempts to abolish this institution. The Lords of Capitalism have opposed every piece of progressive social legislation in America: the abolition of slavery; child labor laws; the six-day work-week; the five-day work week; time off for holidays; women’s right to work and vote; racial equality in the society and in the workplace; sick-leave; maternity-leave; vacation for workers; minimum wage laws; health-care insurance for workers; environmental protection. If it had not been for the growing power of labor unions in America – and the growing power of the middle-class -- America would still be living in a moral and political feudalism – which is always the state of social systems where worship of ‘tradition’ hostility to rights of the poor crystallize and rigidify.

The obscene profits generated by oil companies, insurance companies, and banks in the last decade give us a pretty good picture of what unregulated business is all about. Regulation of business is one of the prime jobs of government. Such regulation needs to be rigorously set up and enforced to protect the consumer from unscrupulous business practices. The difference between Wall Street and the Italian Mafia across the river (and any mafia, for tht matter) is that Wall Street owns the government and makes the laws and the mafia only gets to borrow the laws on occasion through bribery, extortion and terror.

There is a thin line between regulations protecting the consumer and regulations assisting economic expansion in an affluent society, both of these ends ultimately being the goal. Government’s job is not to strangle legitimate business, but to discipline legitimate business to keep it from becoming illegitimate.

Government climbing into bed with government threatens the existence of a democratic system of government. If business interests buy both parties in the government, as happened during the 90’s when Bill Clinto essentially sold the Democratic Party to Wall Street – the Democrats up to that point having been the part of labor – then plutocracy replaces democracy. It does not matter which side wins the elections – big business owns both parties.

This is the situation we are looking at presently.

God Has Told Noah to Re-Build His Ark

We are emerging from – and this will involve a very painful recalibration of our virtue and values -- a rapacious age of materialism, business expansion, glorification of the entrepreneur, the fleecing of the consumer by banks and credit agencies – an Age of Greed (an Age of White Collar Mafia on Wall Street) that has turned most Americans and most Europeans and many world citizens into credit-slaves, eager to exchange their own financial freedom for the seeming economic success defined by unending consumption in the name of prosperity and technological progress. Success is measured in this type of society by the quality and quantity of objects one owns: houses, vehicles, electronic devices, designer clothes, etc.

When I write that we, as a society and as a globe and as a race, have turned our back on God, this is my meaning: Human character is not the measure of the man in this age; but material goods are the measure. In Biblical history, God turns His back on Man when Man forgets God. Metaphorically, this is what happens when the Night-Cycle of death and pain succeed the Day-Cycle of pride and wealth and self-worship. Man is knocked on to his knees. Man, today, is being knocked on to his knees, so that he can remember that he serves creation, life on Earth, and does not define such creation.

Nature (moral gravity) is seeking to get even with Humanity.

When I describe the shadow-side of the economic expansion, I am also very aware of its opposite: the relative political peace and economic well-being that has graced the world, more or less, since the defeat of fascism in 1945.

I am not a hater of business, or of the business class, and their political party in America, the Republicans, although it may seem that way from my first few statements. In my view Ronald Reagan ‘saved’ America from the chaos and stagnation of a protracted democratic rule – the surrender to the malaise of nihilism, so wonderfully exemplified by President Jimmy Carter, with his messianic vision of self-sacrifice and the desired death of American Exceptionalism. There was a time for the Republicans – the personification of the Cowboy myth in America – the prophets of free enterprise, individualism, law and order, science and reason, survival through strength, the glory of wealth and social hierarchy and Man above and segregated from Nature.: a rising to the trumpet of Empire.

However, there is also a time for the Democrats – the personification of the Indian myth in America – the prophets of a planned economy, the community, justice, poetry, art, metaphysics and philosophy, survival through diplomatic alliances, the glory of thought and culture; with humanity as a wise and modest part of an integrated Nature.

The Republicans represent the Day Hero in all its Solar bodily glory and youth today.

The Democrats represent the Night Hero in all its Lunar glory of culture and thought and maturity.

When I speak of the real cause of the financial meltdown in 2008, I make reference to the mechanism of duality which drives all phenomenological expression -- at least on this Earth, and, possibly, in this Universe. The discovery of anti-matter in the 1920’s seems to indicate this Law of Duality is an essential character of this universe. Religious thought dating back thousands of years has assured us that duality is the guiding principle of all creation, all processes of evolution. Some religious thought, especially that generated in the Mediterranean, insists this duality is the manifestation of God (light) and the Devil (darkness), two principles which are engaged in an eternal struggle on Earth for control of the world.

Asian thought (Hindu and Buddhist thought most clearly, and Japanese permutations of Buddhism) understand this duality to be a secondary manifestation of the world, and, as such, an illusion. The world is a ring, a stage, in which the struggle or dance between light and darkness is essentially the illusion driving all life into activity, creating passion, politics, war, the struggle of ideas. Us against them; I love that woman; communism is better than capitalism; Day is good and Night is bad.

Asian philosophy says the essential nature of reality is Whole, the One, Unity. And when the One splits in to Two, this is where all the trouble begins.

But, this split is necessary and it is periodical.

Christians and Muslims (and the Zoroastrians before them) have historically aligned with the illusive dualistic view of Nature, seeing the world as a drama expressing the struggle of God against the Devil. Typically, in this world-view, you, are, yourself, God’s emissary, and your opponent, by default, becomes the Devil’s agent. Christians and Muslims have a long and terrible history of arrogant religious tyranny, oppression of differences, racist theology, and a hyper-polarized conformist ideology. (This structural fuel of duality is not just produced in religious thought. Communism, an atheistic theology, assures us, in a different diction, that communists work for God and capitalists work for the Devil. A different language but the same underlying mechanism.)

Christianity has had its reformation, and its separation of church and state. Islam is in desperate need of such a reformation if it is to evolve and experience a true life-cycle, rather than to remain situated at the edge of the moral world, desert-bound, it’s identity nested somewhat comfortably within the role of World-Destroyer, the crescent moon, the scythe, armed to try to kill the Day-Hero, who is the Devil in their anti-material theology.

To say that Christianity has had its reformation, is not to say that all is right and good with the Christian world. The most likely result of the shattering of the global economy will be a reconfiguration of political power in the world, similar to what happened in the 1930’s. Further polarization is guaranteed. Further manifestation of fundamental Christianity, or a form of it, is very likely, as the conventional morality of civilization breaks apart and racial, religious identity begins to form as an expression of the life-and-death emotion that lives in the heart of the primordial beast waiting inside of the civilized law-abiding modern man. Civil war in Europe, between Christian/Aryan elements against Muslim ‘invaders’, is almost guaranteed.

From the Fracturing of the World-Egg, a Real New World Order Will Eventually Emerge

Economic collapse ensures political transformations on a grand scale. The fracturing of the World-Egg will allow the new stage of the Divine Idea to be born, but on the other side of the Night Experience we are all currently entering.

This book will be, among other things, a prophecy of the coming events on the world political scene. The Western World, and its shadow, the global economy, is about to reap the Biblical whirlwind again. (I say ‘again’, because the Day and Night sequences of history come along at regular intervals, intervals that seem to be calculable also, and will continue to do so, apparently, until our universe disappears.)

In American politics, this current duality is expressed through the two forces of Republican and Democrat. The Republicans tend to see themselves as God’s party, the party of the Father, the party with Christian roots. Democrats also claim Christian roots – in truth, the Democrats are the party with New Testament roots, roots in the theology of the Son, Jesus Christ, the advocate of Universal Love and universal tolerance. The Republicans, famous for their righteous intolerance, are the party with Old Testament roots, worshipers fo the Jewish God, the Father, the ‘Angry’ God, the vengeful God, the God of the Promised Land, the Covenant, literalist theology, an eye for an eye and a tooth for a tooth.

Many Republicans (especially those with evangelical ties) tend to view liberal Democrats as agents of Satan, as agents of social license, political and moral decay, the party of homosexuality, drug use, broken families, witchcraft, willful degeneration – in essence, the party of the antichrist.

Many polarized Democrats, for their part, tend to view Republicans as soulless materialists, agents of patriarchal oppression, racists, militarists, fascists, perfectly willing and even eager to destroy Nature for the sake of personal, racial and national profit, using religion as a pretext for aggression, greed, selfish virtue, and mindless conformity to fundamental, literal Christian doctrine, which they see as an ‘in-bred’ form of ignorance.

Each of these views is accurate from only one perspective. Each is a half-truth. That is, an illusion.

The polarized nature can see only two of four moral dimensions of Nature: each can see their own virtue and their enemy’s vice. They cannot see, during their own period of emotionalized manifestation or polarization or incarnation, their own shadow, their vice, or the virtuous side of their enemy. These ‘other’ dimensions are very real also. The Republicans are good and bad, light and dark; the Democrats are the same, to put it in rather mundane terminology.

This partial picture of moral reality makes it possible for Republicans to hate Democrats and for Democrats to hate Republicans, for Muslims to hate and kill Christians, for Christians to hate and kill American Indians….as the wheel of karmic retribution goes round and round.

Duality is the engine of incarnation, and drives the manifestation of nature’s higher kingdoms (of which humanity is one part). It is also, as I have suggested, the motor of the Wheel of Karma, in the Buddhist theology, for incarnation is the stage upon and during which sins are committed through the agency of a desire for life, a desire for a separate existence, and a desire for power, a desire for wealth.

There would be a constant state of war (international and civil war) in the world of men if God – atheist readers please allow me this assumption -- had not also built in to this system (the Laws of Nature, which are both physical and metaphysical) a mediating Middle Principle which seeks to bring peace between the two animating polarities. In one human, social aspect, the Middle Principle is the Middle Class of a given society, situated between perpetual enemies, the rich and the poor, patricians and plebians, republicans and democrats, whites and blacks, men and women, north and south, east and west….

What is it Leonard Cohen sings?

There is a war between the rich and poor,

A war between the man and the woman.

There is a war between the ones who say there is a war

And the ones who say there isn't.

The Middle Principle – and the Middle Class – Is Life.

Disappearance of the Middle Principle is Death.

When the Middle Class is large and vital, this class acts as the creative principle of the society. The middle pillar, the middle class, as a kind of social organism, joins the rich when the power of the poor needs to be reduced, when the chaos of rebellion and resistance to order becomes too dangerous to the life of the society – and when the individual members of the middle class believe they can gain a more comfortable, secure life by joining the ruling class – that is, when they get greedy. The middle class joins the poor when the power of the rich needs to be reduced (as we saw happen in 2008, with the election of Barak Obama), when the ruthless ‘survival of the fittest’ capitalistic, individualistic ideology turns a blind eye on the sufferings of the poor, and when capitalist greed sinks the boats of society, and endangers the continued free existence of the society. When the individual members of the middle class dream about becoming rich, they join the ruling class politically, creating Republican rule (1983, for example); when they dream about becoming poor – which is the shadow side of the ‘American Dream’, the nightmare-side -- they join the working class politically, creating Democratic rule (this is happening today). Guilt can also drive the middle-class into the arms of the poor – guilt for the sins committed by their fathers – as happened in the 1960’s and 1970’s.

When there is no middle class, there is no creation in the society – the ‘water of life’ has been withdrawn from the system – and the two poles are fixed in deadly opposition and civil war. When there is no viable middle class, the society is essentially dead. It has lost its animating heart, it’s vital and mediating principle. Then there is no evolution. All that’s left is conflict, and, ultimately, the triumph of either the Fascist Father or the Communist Mother principles.

In a living society, the middle class (the mediating middle ‘Life’ principle – the Demiurgos in some mythologies) creates the Heavens and creates the Earth sequentially, by cycling (via the infamous Figure 8) both above and below, informing gods about the nature of Earth and informing men about the nature of Heaven.

In one sense, this Middle Principle is a ‘mirror’ which kills or neutralizes the polarization of both Heaven and Earth by presenting a picture of the ‘virtuous side’ of the opposition to each of the polar opposites. It pictures ‘wholeness’, which kills the fragmented part it encounters, thereby educating it into a larger scale of perception.

We recognize this mediating middle principle in the intellectual mechanism (dialectics) by which opposites (Thesis and Antithesis) are synthesized into a new idea or entity incorporating, in itself, both views, ideas and values of the original polarity. The middle principle arms both sides with ideas they can use against the other, but always acts as a balance against too much power being gained by either side.

The clearest form of the manifestation of this Middle Principle in politics is democracy, in which system Right and Left wings of political power are held together as a unity by the informing Middle Principle which is “Republican” during the Day Period of political manifestation and “Democratic” during the Night Period of political dematerialization. The Middle Principle in a viable democracy keeps both sides from gaining absolute power. When either side gains absolute power, the society is no longer alive and evolving.

The Middle Principle, by educating and evolving both sides of the polarity, is Life, itself, whose behavior, thus, ensures the circulation of the life-force between the Head and the Body, between the North and South, between the Abstract and the Concrete Physical – between the East and the West, between Social Obligation and Individual Will -- much as the heart in the body circulates blood throughout the body, north and south and east and west.

The Middle Principle, the Soul, is the guiding force of evolution, educating the Body of Life during the Day-Cycle and educating the Mind of Life during the Night-Cycle. Material Science evolves; Spiritual Science also evolves. Each cycle is an attempt to update the world-form that preceded it, expand it, reconfigure it, and take it a step or two further in Time. Science evolves; Religion evolves – but, without the Middle Principle, the Soul, nothing evolves, everything becomes frozen in time.

Without the Middle Principle, Eden is turned in to a desert.

Does the Anti-Universe Exist Inside the Universe, Folded and Turned, And Composed of Anti-Matter?

The discovery of antimatter in the 1930’s (the discovery of anything in science is almost always the work of many people spread over many years – so whether Paul Dirac or Carl David Anderson is given credit for the ‘discovery’ of matter’s magical mirror-world seems relatively inconsequential now) opened a new door to the scientific understanding of the nature of the universe, and the illusive quality of the nature’s duality. Anti-matter is a mirror-image of matter. An atom of matter is composed of a positive nucleus -- a positive proton and a neutral neutron -- and orbiting negative electrons. An atom of anti-matter (the anti-atom) is composed of a negative nucleus -- negative anti-proton and a neutral anti-neutron -- and orbiting positive anti-electrons. An atom of Hydrogen is mirrored by an anti-atom of anti-Hydrogen – although there is no real scientific concensus as to where this anti-atom of anti-Hydrogen may be hiding at any given moment.

If our physical universe is composed mostly of material atoms, is it not likely that antimaterial-atoms probably compose an anti-universe that ‘reflects’ our material universe? Even if we use this description only as a metaphor at this point, it is not painful on the imagination to see the Republican Party as the masters of the Material Universe and the Democrats as the anti-masters of the Anti-Material Universe.

I am not making value judgments about these different seasons and universes. As I have written, each universe has both a positive and a negative aspect. In a similar way, the North is the material world, and the South is the antimaterial world, with the magnetic field of perception reversing at the equator, which divides the Earth in to two equal halves. A metaphor of this ‘mirror reflection’ shows that water runs down a drain counterclockwise in the Northern Hemisphere, and clockwise in the Southern Hemisphere.

When the ‘Ideal’ Republican raises his right hand, the ideal Democrat (the reflection in the mirror) raises his left. To the Republican (especially as manifest through the so-called ‘Religious Right’ of fundamentalist Christians) white is good and black is bad. To the Ideal Democrat, black is good and white is bad. The dark-skinned (southern) races have been persecuted by the Christian-driven (northern) white races for so long that the ‘moral balance’ is now tipped toward the southern races for the sake of balance.

The Republican sees wealth as a sign of God’s personal reward. The Democrat is suspicious of wealth, and feels guilt associated with wealth, assuming that success in business is a form of successful corruption, which suggests a metaphorical ‘contract with the Devil’. This, too, is more in line with the theology of the Sun, Jesus Christ, who warned the rich could not get in to heaven.

The Democrat is against matter, against the corporation, which is a manifestation of the body-life. The Republican is for matter, for the corporation, for the body, as a manifestation of power in the world – and against spirit (or antimatter) as a manifestation of weakness, weak-willed female weakness, abstract weakness, poverty, death, darkness.

I am not suggesting that the atoms composing the poles of matter and antimatter are stationary and fixed. These poles evolve and change, as long as the middle principle exists and continues to educate the poles. The wheel turns and individual atoms ride the wheel into heaven and back down to earth.

The Republican becomes a Democrat; and a Democrat is transformed into a Republican. Evolution involves the weight of the fulcrum changing its orientation, tilting toward the Father or tilting toward the Mother.

In the second half of this book, I will focus on my own life, through the books I have written, showing how perception evolves with the transition from Day to Night and from Night back to Day again.

We do change. That is how we survive.

Europe Slouches Toward Bethlehem, Toward the Fatherland, To Be Re-Born

Europe has tilted toward the Mother for many years now, since America has been willing to play the Father-Role for Europe (for American gain surely, not out of the goodness of her heart). Now Europe will swing back toward the Father-Worship that got Europe in so much trouble 72 years ago. Recent European elections show that socialists are beint eased out of power now and center-right and far-right parties are gaining power, blaming immigrants for social problems, blaming dark-skinned natives for the ruination of culture. This is just the beginning. Europe will be fighting for her racial life, as Islam has moved in, threatening to throw its blanket of submission to Allah over the heads of European States and suffocate them with ideological righteousness – which is another form of fascism.

As Europe swings to the Father again, America swings back to the Mother. This happened in the 1930’s as well.

The news in 2011 that the Marine Le Pen, leader of the Far Right party, Front National, formerly considered a Neo-Nazi party when her own father was the party leader, was leading all other candidates to become France’s next president indicates exactly what is happening in mainstream Europe.

If this social metaphor I have introduced is an accurate picture of reality, then I would expect science to discover, at some point soon, the method by which the Middle Principle (composed of both matter and anti-matter) can ‘become’ matter at one phase and anti-matter at the next. In fact, in 2006, science did discover a particle, far smaller than any atom, that switches itself back and forth between being a piece of matter and a piece of anti-matter, 18 trillion times each second. The back-and-forth switching appears to be one of the fastest processes in nature.

In the world of mythology, Mercury was the messenger between the gods and men, carrying messages back and forth between Heaven and Earth. Mercury was associated in Western theology with Michael the Archangel; and Michael the Archangel was associated with Jesus Christ (Michael was Jesus when in Heaven; Jesus was Michael when on Earth).

What does all this have to do with the collapse of the American-driven capital market system? And where is this collapse leading America, Europe and the world?

Those are questions we will examine as we progress through this book.

I am not of the opinion that the most recent collapse of the Republican-engineered global American Empire expansion, and its form, the global economy, signals the end of the American empire and will propel America into the state of a lost nation or a second-rate power. Many wish for this. Many Europeans speak gleefully of this vision as a wish the result of which would catapult European nations back into a position of empirical rule and global dominance, a destiiny for which many of the European Ruling Class are pining, remembering the good old days of their own ‘unlimited’ poweer and wealth through oppression of Africans, Asians, South Americans and even North Americans. But history does not limp backwards. The days of European youth are gone. But Europe will play a large role in the coming apocalyptic events, which role I will consider later in this book.

This current economic collapse will last for many years and will dramatically alter the face of global political alliances and power. If there is any accuracy in the numbers I will introduce later in the book, this Great Depression will last through, approximately, the year 2019 and will be accompanied by earth-shattering wars and political re-alignments.

2019 is not the end of the power of darkness (anti-matter); but it will be the end of the powerful contraction, the condensing of the Light Principle into the seed formation and the first appearance of weak growth – the ultimate apex of power of the Night Principle. Defeat of the Darkness will occur in 2028.

We need to understand that the current crisis is not primarily an economic crisis – the effect of the crisis is a collapse of the global economic system. What has caused this economic collapse is a spiritual crisis resulting in a loss of identity, as Western Ego-Inflation (in the words of Jungian analysts) has popped, is deflating and is entering the formless world of Night, or Material Darkness. If Ben Bernanke succeeds in injecting a destructive dose of inflation into this deflation, then the world will get both deflation and inflation (remember Weimar?), the worst of both worlds: the disappearance of jobs and consumer-capital, and the hoarding of food and raw materials, making these too expensive, kill the phantom global economic ‘recovery’ and triggering food riots and social revolutions.

Economic Depressions as the ‘Wounding’ of the Sun-Hero

Economic depressions come regularly in the history of living human systems as the male identity (the Ego, the Solar Hero) ‘dies’ or is defeated, turns inward and descends into the formless darkness of chaos and self-judgment in an attempt to gain self-understanding, peace and comprehension of the meaning of life – to find his God, in other words. The Ego (now Non-Ego) also seeks in the Darkness the identity of its next incarnation, its next life, its next phase of bubble-creation – Seed Time. The convex bubble (extroversion) becomes a concave bubble (introversion), digging a hole in the inner nature similar in extent and opposite in moral dimension to the dome it has built in its previous Day-time incarnation. The Day-Ego builds a dome in the world of matter; and the Night-Anti-Ego builds an anti-dome in the world of antimatter.

In nearly every religious system, creation of the world begins with the breath of God. The Creative God(s) ‘breathes Life in to’ – i.e., blows a bubble -- in the fabric of eternity. This bubble becomes a separate particle of Time (a mortal phenomenon with a defined length of existence) inside of which, and through which, Life expresses itself, experiencing objectivity, until the innate alarm clock goes off and the particle bursts or collides with its opposite. The Male Expansionary Energy pops and vanishes into the Darkness, in much the same way that Icarus, after flying at the Sun, singes his wax wings and falls into the ocean. Death/Dissolution is a falling back in to the waters of the Unconscious. Day-Energy builds the positive world; Night-Energy builds the negative world, destroying the world that the Day-Energy has created.

This is the real cause of the collapse of the global economy. The alarm clock went off. Energy changed its form and direction. The Sun-Hero was wounded, fell back toward earth, and was transformed in to the Night. And now the mythological Darkness, the Power of Chaos, has taken control.

About times and dates, brothers, there is no need to write to you for you are well aware in any case that the Day of the Lord is going to come like a thief in the night. It is when people are saying “How quiet and peaceful it is” that sudden destruction falls upon them, as suddenly as labor pains come on a pregnant woman; and there is no escape.

1 Thessalonians: 5: 1-3

Night-Cycles: When the Problem-Solvers Can’t Solve the Problems, Chaos Results.

What can we do about this contraction of matter, this expansion of debt that broke the camel’s back?

Very little really. We cannot ‘fix’ the problem. Only Time can fix this problem. And a steady and clear-minded unwinding of our national debt is the mechanism by which we empty the glass so that we will be able to again begin filling the ‘empty’ glass when the new Day arrives around 2019.

We need to tighten interest rates, to discourage more borrowing and to encourage saving and paying off of debt – but these will all come with time. Most economists fear that tightening rates will choke off economic growth – but no growth is possible during the Winter economic season.

There is no easy path. The Night-Cycle is painful. The Night-Cycle is filled with fear, with insecurity, with the defeat of those thinkers trying to engineer a recovery.

The Night-Cycle is the Day of the Lord, the Day of the Sabbath, when rest happens, when rest rules.

The Republican, masculine Day-Force, wants to ‘fix’ things. The Republican is essentially a Cowboy, an Engineer, a Problem-Solver. ‘Give me a problem to solve; and let’s keep it simple.’ In the (paraphrased) words of John McCain: ‘Let’s fight, fight, fight!’ Let’s fight chaos; let’s fight complexity; let’s fight pessimism. If we are willing to fight, we can overcome anything.’

That is the Day-Hero speaking.

But the Day-Hero has no power in the world of the Night-Cycle.

This wrrior-approach works wonderfully in the world of matter. But it does not work in the world of antimatter. Matter, rational coherence, male externalized energy literally disintegrates as it approaches the horizon of the black hole, the Female Reality of the Night-Cycle.

Everything that worked for male energy in the Day Cycle tends to not work in the Night-Cycle, for male energy has lost its electrical erection that dominates matter.

There are new Laws of Nature in the anti-dome of anti-matter, laws which are based on the laws of Metaphor and Analogy, not upon the Day-Nature laws of Cause and Effect. Day-Nature is measured from the outside; Night-Nature must be measured from the inside. Day-Nature measures from the outside in a controlled environment; Night-Nature measures from the inside with tools of metaphor, analogy, symbolism.

The tools that work in the sunlight do not work in the moonlight.

The next decade promises to be very difficult; but it will also have its rewards. What can individuals do now? Each person must find his own God – and seek to make himself Whole, make himself the Middle Principle. It is time to build an ark, to acknowledge the Moon as the counterpart of the Sun, to paint blood on the door, and to prepare for the Force of Death to pass over the world community once again. Fear of God is a good thing. Modesty is a positive value. Generosity and understanding and the community of shared suffering are virtues.

If there were only these two in the world – intellect and body –

but there were no soul, then the intellect would not be drawn to the

body (for it is entirely immobile and is not supplied with a principle

of movement, although it is far distant from the body), nor would the

body be drawn to the intellect since it is just as incapable and ineffective

in moving by itself, and is far removed from the intellect. But if soul

is interposed, conforming to both, there may be an easy attraction

from one to the other.

The Planets, Marsilio Ficino

CHAPTER TWO.

ANATOMY OF A CRIME

A Lust for Life is Also (Somewhere Below) A Fear of Death

"We're breaking the law, okay? We're breaking the law.

You know we're breaking the law. I know we're breaking the law.

What the hell do you think is going on here? We're sitting on an Enron.

This is…bigger than Enron. I mean, we’re doing four billion a month in loans.

If housing drops, housing value drops, people start to default, you know?

This is a nightmare. These people will not survive it,"

Banker Paul Bishop to Executives at World Savings Bank

The Historical Low Tide Reveals the Historical Crimes of Humanity

Can one speak of a ‘crime’ having been committed in the context of inevitability? Is there free will to act against the concords of one’s own nature? Is Fate absolute? Is Destiny a loose-fitted garment that allows the individual the authority to choose an act that deviates from the harmony of history, from the logic of the path of one’s own Destiny?

These are all large questions that have been debated for millennia.

The electron beam is destined by its momentum and by its very definition to act in a certain manner (the Laws of Nature). But the electron beam is composed of myriad electrons, each free to act according to its own persuasion, apparently, but also to be balanced by some other electron in the beam so that the destiny and definition of that electron beam is not violated. Destiny does not pick which electron seeks freedom and which electron exercises balance. Apparently there is chance, and, at the same time, there is necessity and order.

Is this a scientific model which describes a solution to the dilemma of human fate, destiny, and free will?

So, there was a crime committed. There were many crimes committed. Corruption is a loss of balance between ‘human nature’ and the laws that govern the boundaries of human activities. Many of the human laws that have been in effect since the Great Depression in the 1930’s and that were designed to limit the crimes of banks and businesses and to protect American consumers from commercial robbery were rigorously stripped away by Republicans and Democrats alike, Democrats falling in to line with Republican dogma which essentially turned over all business-related policy-making decisions to American business-leaders, the implication being that the ‘real world’ of material profit was really the only world that really mattered.

The ideology of the ‘rugged individual’ is the essence of modern Republicanism: God rewards those who work hard, who innovate, who conquer the world; and those who don’t should (there was a moral imperative in all of this) be condemned to poverty and loss. Selfishness and ‘Ego Expansion’ (Self-Actualization) become positive values that drive the world into the future and are the mark of society’s ‘winners’: risk-takers, evolutionary titans, entrepreneurs: those who dare, who lead society in to the future by being willing to take a chance – or break a law, cut a corner, exploit an opportunity or perhaps a race of people.

This ego-expansion (“I am Number One – I am, in fact, like a god!”) was the doctrine of manifest destiny expressed on the psycho-sexual and economic planes. ‘Losers’ are those with too much conscience, too much modesty, too much subjectivity, too much introversion – not enough aggression, talent or ambition – or, if necessary apparently, cunning, even criminality.

If one lives in a big house, apparently he has achieved the American Dream, even if he is rich because of thievery and corruption.

Tony Soprano is well-loved in America. We know that he is a murderer, a cheat, and lives off of other people’s labor. But being rich is sometimes enough. Why should we judge him. Nobody’s perfect.

Nobody’s Perfect: Are ‘Losers’ In This World Actually ‘Winners’ in the Next?

America, as a culture, has always had ultimate respect for ‘winners’, ambition and success. Losers were the shadow side of this bright light: lazy, shiftless, criminal, drug-addicted, stupid. For centuries these descriptions were generally reserved for the under-class of dark-skinned Americans: American-Indians, African-Americans, Latinos, Asians (although Asians did much through hard work and discipline to elevate themselves as a race of competitors, though mostly through the arts of mimicry and doubled or tripled effort)…

American success was once defined, as a reflection of the same European success and world-dominance, as the triumph of the White Race. In persecuting the dark-skinned races of the world, the White Man was suppressing the Shadow, and performing his religious duty by dominating the devil.

Expansion of the Ego separates the races into a hierarchy of values (‘colors’ as well as moral virtues), with Will, the Will to Success, the Will to Rule, the Will to be White, rising above all other values. The Ego is separated from the Shadow as the Individual Hero, the Ego, climbs the ladder of Power (to whiter and whiter rays of light) and takes his place in the Sun, with the Sun, becoming one with the Father.

And, certainly, there are many positive repercussions to this isolate Will climbing the ladder of success: climbing to power, ruling the world, bringing innovation, technics, new ideas, and prosperity with him on his cosmic adventure.

The Sun Hero climbs out of Darkness and brings light and fertility to the whole world, warmth and expansion, wealth, cities, human culture, technology. But there is a shadow-side also. Human pride, and Ego-inflation, result when the human being attempts to become a god, attempts to become the Human Sun, seeks to control the world, make it submit to his own will, as if he were God.

For this sin of human pride, Ego-Inflation, there is the punishment of Ego-Deflation, a kind of psychic or moral death, at which time the prideful human, having fallen from the realm of power and immortality, must face his own Shadow, must face his own sins, his human limitations, the small side of his own nature, which he has condemned, and which now waits for its chance to judge him.

The sin or crime of Economic-Inflation results, ultimately, in Economic-Deflation. The Day of success, and wealth and power must become, in time, the Night of failure, poverty and recognition of one’s limitations.

Orthodox religion, by definition, has racist implications. The Light of Day, with its heavenly qualities, joy, security, wealth, power, child-generating fertility, triumphs over the chaos of Darkness, over the uncertainty of women and over the unproductiveness of Old-World tribal culture, Moon-worshipers, non-productive and non-generative. Modernity triumphs over Antiquity.

In all cultures, such ‘Light’ represents God’s blessings. God is Light; and the Devil is Dark. By implication, God is White; and the Devil is Black. Humans in the grip of fundamental religious passion naturally associate color with theocratic meaning. It is in their own interest to do this, for survival becomes an issue, survival of race, nation, family, self. In nature, light fights darkness; darkness triumphs over light; light triumphs over darkness.

Oddly, and this fact is seldom recognized by fundamental/evangelistic Christianity, Christian tenets espoused by their founder, Jesus Christ, implore peace, generosity, modesty, poverty, non-violence are ‘virtues’ typically possessed by the non-white ‘losers’, the shadows of the white-driven feeding-frenzy for moral absoluteness, material success and world domination. In fact, if I remember my Catholic litany of evils correctly: avarice, ambition, violence, greed for worldly power and status --the ‘peace and prosperity’ factor -- were considered evil values and indicated an alliance with the Devil. Worldly Power did not imply God’s blessing. Instead, worldly power and worldly success implied God’s curse, and the Devil’s insidious contract with the lost soul.

In fact, the historical animosity between Christian and Muslim stems mostly from these opposite views as to the toleration of worldly values. The Muslim (especially Arab Muslim) has almost no generosity toward the Earth. As such, the Muslim tends to spread a desert wherever he goes. Muslims seem to view the brutalization of the woman as a positive virtue – linking the female and the earth. The lack of water (the desertification of the Earth), poverty, and the oppression of the female-shadow are all part of the same paradigm, no doubt. The hatred and mistreatment of Jews are also a part of this same thought-structure. But that is a theme that I will be looking at later.

In the World of Perceptions, Half-Truths are Forms of Ignorance.

Are ‘Winners’ Actually Doing the Work of the Devil?

I am writing, here, about perceptions, of course. The inability of the human being to see all four moral dimensions at the same time can be a fatal limitation. The illusion that one is right, God-instilled and God-installed, brings about war between the opposites and is the mechanism that drives history, as we have discussed. Here again, the world appears as the object and the anti-object, each a mirror-image of the other, seeking to kill out the evil Other it finds standing accusatorily before it, reflected.

Each two-dimensional perception is a half-truth. By the same token, each two-dimensional perception is a half-lie also, by mathematical necessity.

Humans labor in a vale of darkness. Sometimes we see the world not at all: everything is dark. When we see the world very clearly, with a bright light of understanding, we are most often, at this point, seeing but that half-truth that gives us security in identity: seeing what we need or want to see, for our own psychic or spiritual reasons. Only through complete detachment from both sides is clarity of vision possible. But clear-sighted detachment is also a stage, one that decays into a state of incarnation as the soul is thrust into action on the side of either the Earth or Heaven, on the side of either the poor or the rich, on the side of either the woman or the man.

We don’t wish to lose our focus.

The ‘Anatomy of a Crime’. A crime was committed. Many crimes were committed. Many trillions of dollars of global wealth were wiped out (some would say stolen) in a matter of months. Lives of millions of human beings were destroyed or at least significantly damaged in many countries throughout the world – in the blink of an eye. Retirement savings vanished. Frozen credit -- and absolute terror brought about by a failing financial system -- led to a constriction of the circulation of currency, causing death in the body politic. Millions of jobs were wiped away, creating a world-wide panic, which led to a further constriction of spending.

History will look at the Great Credit Crunch beginning in 2008 as the greatest looting of private and public wealth by officers of public corporations colluding with their sycophants in the government in the history of the world. Wall Street has proven itself again to be a nest of vipers. The great Robber Barons of the nineteenth century – Rockefeller, Dale Carnegie, Jay Gould, J.P. Morgan, Cornelius Vanderbilt, Henry Frick, Edward Harriman – had nothing on today’s crooks, scammers and enablers: Christopher Cox, Joseph Cassano, Dick Fuld, Ian McCarthy, Stan O’Neal, Lewis Rainieri, Angelo Mozilo (who ‘earned’ over $400 million in five years overseeing Countrywide Credit’s mortgage factory), Chuck Prince, Jimmy Cayne, Christopher Dodd, Ralph Cioffi, Matthew Tannin, Steve Crenshaw, Sir Fred Goodwin, Andy Hornby, Franklin Raines, Hank Paulson, Phil Gramm, Bernie Madoff, “Sir” R. Allen Stanford, Bill Clinton, Kathleen Corbet, Marion and Herb Sandler, John Devaney, David Lereah, Ben Bernanke, David Oddson, Burton Jablin, Donald Trump, Paul Greenwood, Stephen Walsh, James Nicholson, Mark Bloom, Neal Kashkari – bag-man extraordinarie (i.e., ‘Kneel; and Carry away the Cash’) – and, the inimitable Lloyd Blankfein, of Goldman Sachs, who claims he’s just “a banker doing God’s work’.

“Is it possible to make too much money? Is it possible to have too much ambition? Is it possible to be too successful? I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”

Mister Blankfein would be hillalrious if he was doing stand-up comedy, like Rodney Dangerfield. Instead he is merely defining the automatic response of the all-conquering Alpha Male when he confronts a full glass: he just keeps pouring. He doesn’t know what else to do but attack. The world is a challenge to the strength of his will-power. He does not back down. He charges straight-ahead, always.

The people I have listed above (and there are many, many more who should be on the list) are all people who helped to kill the golden goose that has been laying millions of golden eggs for many years so that we Americans (and many world citizens) could live more comfortably, if, indeed, more dangerously indebted. But now the goose is dead. The goose is dead.

But the goose will be re-born aagain, in some form, in some place on Earth, perhaps even again in New York City. Nothing is impossible, right? And you can’t keep a bad man down.

Nobody’s Perfect: The White Protestant Mafia on Wall Street

How do we define looting?

‘Looting’ is defined by Nobel Prize winner George Akerlof and co-author Paul Romer – in their article published in 1995, “Looting: The Economic Underworld of Bankruptcy for Profit” -- as making loans ‘with a total disregard for even the most basic principles of lending…acting as if future losses would be someone else’s problems’ – which they have become clearly, the problem of the American taxpayer, through government (bank-engineered) bail-outs.

Even then, after losing billions, and surviving as an entity only after government intervention to the tune of some $170 billion in taxpayer bailout money, AIG, American Insurance Group, announced intentions to pay executives $450 million, including bonuses of $165 million, this after announcing a loss of $61.7 billion for the fourth quarter of 2008, the worst corporate loss in history.

What is the difference between an AIG executive and a Mafioso? Not much apparently. Except the mafiosos don’t get to raid the national treasury when their bad judgment leads to a loss of their own money, humiliation and public disgrace.

The troubling truth is that AIG is probably not much different than most international corporations. The anti-corporate mentality that manifested so potently in America in the last Ego-Deflation Night-Cycle period (1965-1982) should return with a vengeance after this arrogant, callous looting of the public coffers by American businessmen and women (mostly men, in fact). If a very public dressing-down of American business does not occur – where have you been Barak Obama? – then Wall Street will assume that such unethical (illegal?) behaviors will be supported by Americans every time it happens.

The American Treassury is not the slush fund of Wall Street high-finance gamblers. I cannot believe that I or anyone would have to make this statement.

Wall Street’s cry since the 1970’s has been: ‘Get out of our way and let us sink on swim on the basis of our own talent and judgment.” We can police ourselves, they insisted. When they failed in 2008, they did not bite their lip, lower their collective head in shame, accept their guilt and their failure, and take their medicine like men – which is what they seem to demand from ‘average Americans’ who fail – they went whining to Washington, sniveling (their lackies, who now always seem be be running the Treasury Department, did their sniveling for them, in fact) – ‘Give us another chance! Please give us a second chance!”.

Wall Street whines about having to pay taxes; pays billions to elect politicians from both parties who promise to keep taxes low and keep laws beneficial to Wall Street. When they make profits they refuse to share their profits with ‘average American’ taxpayers – they are exceptional, remember; they are ‘Masters of the Universe’; they are winners, don’t believe in losing, and never will be losers – because they are all doing God’s work.

When they do fail, they fail BIG. When they lost everything in 2008, they did not take the pain like the stolid, wounded cowboy they claim they are -- they sent their lackies to the owners of the casino and BEGGED for a new line of credit, which the Top Crook gave them: free money (0% loans) coming straight out of the pockets of the ‘average” American taxpayers they so clearly abhor.

Night-Cycle Pruning in the Garden:

Is It Time to Break-Up the Big Banks and the Big Corporations?

Is It Time to Break-Up the Fed As Well?

It is time to remember Teddie Roosevelt and his big stick, and, even more, his gigantic pruning sheers. American corporations need to take a substantial haircut for the mistakes they have been allowed to make (even Lloyd Blankfein needs a haircut, if one can imagine that?). Night-Cycles are times for pruning the garden where the Tree of Life grows. Nothing can grow in a garden where a few plants become too large and too aggressive and greedily dominate the sunlight. ‘Too Big To Fail’ should mean ‘Too Big To Exist’. ‘Too Big to Fail’ should also mean ‘A Threat To Democracy’.

American citizens should no longer willing to allow Goldman Sachs or Walmart or Microsoft or what used to be Philip Morris to make its laws or determine American labor policy.

America needs to make certain, through new legislation, that no American company ever again has the power to threaten the global economy with its gambling habits or to threaten America’s democracy with the corrupting power of too much financial influence over American politicians and legislators.

Politicians who enabled this Great Looting should be held accountable, voted out of office, and should be scrutinized with elaborate diligence for crimes they may have committed to abet the theft of these trillions.

Of course, we have not mentioned Allen Greenspan with this group of thieves, conspirators and enablers. If all the above (mostly white) men and (a few) woman were crew members on the Pequod, chasing the Great White Whale of Omnipotence in the dangerous oceans of financial risk (almost all using other people’s money to make themselves obscenely wealthy, by the way), the captain of the boat was Allen Greenspan, whose manipulation of the money supply and whose cheerleading for Americans to take on more and more (and riskier forms of) debt makes one question either his sanity, his level of awareness, his capacity for denial, or his honesty.

Then, as if we might not notice, after stepping down as the Maestro at the Federal Reserve, Greenspan – AKA Ahab -- quietly slipped into a (one would assume) multi-million dollar annual salary position working with John Paulson and his hedge fund, the same guy who made a fortune in 2007 betting against the edifice Greenspan had helped to build, the American Housing Market, shorting the US mortgage market to a healthy $4 billion profit -- which Dear Allen (‘call him Maestro, don’t call him Bob Cobb’) had helped to inflate to unsustainable levels. Talk about your conflict of interest.

One wonders if Allen may have been talking to that ‘other Mr. Paulson’ long before he stepped down as the Captain of the Pequod. (At least Ahab had the decency to go down with his whale, with his obsession, not rise up stuck to a billionaire gloating, without shame, about his own capturing of the white whale – in this context, I guess, Greenspan plays Moby Dick.)

It is, indeed, a shame that Allen Greenspan didn’t have the decency to retire, move to the country (or to another country) and write his memoirs, which would have promised to be the dullest reading since Gerald Ford put pen to paper. Instead, the Maestro tried to slip quietly in to bed with the primary beneficiary of his inept theology.

Like Ahab, in fact, Greenspan is still clinging to his whale, the monster he helped to create, the whale which stove in his empire, stove in his reputation for integrity and ingenuity, rendering him but a smudge on History’s dirty linen, a smudge that may someday end up in History’s Hall of Iniquity, next to the smudge left by Herbert Hoover, the man who ‘caused’ the last Great Depression.

An American Flaw: Character, Integrity, Admired Less Than Wealth, Power and Glamor

Since Americans tend to honor the rich, no matter how they become rich, the political incentive to put the crooks in jail for their crimes during the last Day-Cycle has not yet gained much momentum. We will tolerate a billionaire who steals an old women’s life savings in an investment scam, but we will insist that a poor man who robs a bank to feed his own family be sent to prison for the rest of his life.

This flaw in the ‘American character’ is an obvious immorality – honoring glamour, power and wealth more than honesty and integrity -- that must be corrected in the core of the American system of values – the adulation of winning at any cost, instead of honoring the noble human character. Nobility is greatness; wealth is not. Generosity and decency are real values; cheating to win is a sin against the Soul and is punished by God as such. And that is what we are experiencing now, in this Night-Cycle. God is punishing us for our sins, for our greed, for our selfishness, for our lies and for our indecencies, at the center of which is the ‘I’m Number One’ vain distortion of human grace, the ultimate hubris of which a human being is capable.

Some individuals, admitting guilt or shame as a part of misdeeds revealed by the economic low-tide, have committed suicide: Adolph Merckle, a German industrialist, who bankrupted his industrial empire through investment mistakes; Kirk Stephenson, director of a London private-equity house; and Rene Thierry Magon de la Villehuchet, who lost his entire family fortune through mismanagement – i.e., through investing with Bernard Madoff, the New York City legend who was also, apparently, a fraud. Madoff apparently stole $50 billion in an elaborate investment scam from many investors throughout the world, some his friends, even from his own sons. Mr. Madoff did not commit suicide. His name has now become synonymous with the great thieves in the history of the world. A Madoff Scheme (as in ‘I made-off with your money, ha-ha’) will become part of the world’s vocabulary, as Ponzi Scheme did in the Roaring 1920’s.

Mister Modoff did not commit suicide. But his son did, apparently out of shame for the sins and crimes his father had committed..

Who, What Caused the Economic Collapse?

What caused this catastrophe?

The Housing Crash. Yes. The Great Housing Crash of 2007.

And the name of Alan Greenspan comes up automatically as a footnote or as a preface to this header.

Alan Greenspan was, perhaps, the most powerful (invisible) man in the world for the decade after Bill Clinton’s reputation was disfigured by his Cigar Shenannigaans – Greenspan retired in 2006. Greenspan was a devoted student of the causes of the Great Depression in the 1930’s, a devoted disciple of the ‘rugged individualism’ espoused by novelist Ayn Rand, and a favorite of Ronald Reagan, who appointed Greenspan as the Chairman of the Federal Reserve Board in 1987.

What was Greenspan’s crime -- Greenspan’s sin?

To hear Greenspan tell the tale (in 2008), as he apologized before a congressional committee, almost in tears, for his central role in the obliteration of the American Dream, the American Middle-Class, and the American capital system , he said simply: ‘I made a mistake.’

By this utterance, Greenspan seemed to mean that his mistake was his belief that the private business sector had the intelligence, the wisdom and the self-restraint (integrity is a greater virtue than wealth) to manage risk in a largely deregulated environment. Of course, Greenspan had been one of the prime movers championing the conservative ideology claiming that America needed less government regulation of Wall Street, not more. This all began with the Ronald Reagan Republicans in 1983, and was a reaction to the Night-Cycle understanding/perpective that business, without appropriate shackles, would return to raping and pillaging the consumer, as business eventually did during every Day-Cycle.

When Clinton finally joined the Reagan Republicans in 1999, then nothing held the banks back from sacking the consumer and pilfering the Treasury. Well, Democrats had to eat too.

An agreement between the Clinton administration and congressional Republicans, reached during all-night negotiations which concluded in the early hours of October 22, 1999, sets the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the giant monopolies which dominate the financial system.

The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated.

Power and wealth are seductive, are they not?

One of Alan Greenspan’s Mistakes: American Business Cannot Regulate Itself.

Alan Greenspan over-estimated the Soul of the American (and Global) Business class. Alan Greenspan believed that, faced with a choice between an unrestricted greed that would lead to unrestricted profits but might imperil the life of the economic system and the democracy in which it was housed, and a restricted greed that would lead to restricted, but substantial, sustainable profits stretching into the foreseeable future, the American ruling class would choose the responsible, sustainable path, the one leading to American and global prosperity for many generations to come. Instead, the Global Business Class, led by the Global Ruling Class, chose unrestricted greed, madness, and, ultimately, self-destruction.

In some ways, Alan Greenspan was the embodiment of Gordon Gecko, the financial land-shark, in Oliver Stone’s memorable movie, Wall Street. Gecko tells a group of shareholders: ‘Greed – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all its forms – greed for life, for money, for love, for knowledge, has marked the upward surge of mankind. And greed – you mark my words – will not only save Teldar Paper, but that other malfunctioning corporation called the USA.’

A half-truth again, which looked pretty good in 2004 but looks rather empty now in 2011.

America is not a corporation. A society is not a corporation. Making money is not end-all of life, the only mountain, the only sacred endeavor. Money is a necessity that allows one to live comfortably; but money is not the ultima thule of Life, the only or the highest quest – perhaps, because this quest is for self-content alone, the pursuit of money may be the lowest quest of which mankind is capable. And because we forgot this truth, God is now punishing us. And God will punish us some more until at least 2019.

A funny thing happened to Christianity on the way from Catholicism to Protestantism. This also, was a kind of alchemical process, wherein the message of Jesus Christ was magically flipped. Jesus argued that wealth, earthly power, pleasure, worldly success were the result of a contract with the Devil. Somehow, when this message came into contact with its anti-nature, in the magic zone of the Middle Principle – we will amplify this later – the message was changed: being rich was a sign that God was blessing you. The more wealth, power, earthly success one had, the more this was a sign an individual man had been ‘chosen’ by God for his goodness.

This was not a Catholic idea – although the Catholic power structure is guilty of much that is venal, is guilty of much hoarding of the world’s wealth, and of ignoring the creed that their own founder emphasized, for which he gave his life.

How did this image reversal (think of this as a photographic negative) happen? Clearly, the Father trumped the son (sorry, Donald) – and pragmatism defused the son’s idealism. Pragmatism was one of those ‘hard’ skins put over the Soul to protect the Soul in the harsh world of men – iron-plating on top of gold, a suit of armor fitted over the Soul – so much so as to block out the Soul’s voice during long periods of life, entire adulthoods for many people.

Pragmatism essentially says: do anything you have to do in order to surive and prosper. If the act you perform is evil, cruel or unfair, you do this before your enemies do the same to you first.

Pragmatism is one of the first skins to be put away at the end of the Day-Cycle; and, at that time, as the emptying-out process begins, the Soul is shocked by the Body’s capacity for evil, a capacity engendered by the path and weaponry Pragmatism provided the mind as a system of self-defense.

Materialism has no soul – that is, the soul exists but the body dominates the soul. Materialism does not respond readily to moral codes and ethical restrictions unless it is required to do so by legal addendums. Afterall, the Business Class hires lawyers and pays them terrific amounts of capital each year to instruct that Business Class how to bend the laws without breaking them, or how to break the laws without getting caught. If that were not enough, the Business Class ‘inspires’ lawyer-politicians in the government (how are campaign contributions repaid?) to pass laws that make it easier for businesses to cheat and steal without breaking the law. It’s a good system, set up for the American Ruling Class, lawyers, and our politicians in Washington and in every state, county, and city in America – and, truly, mostly all the world over. Everyone gets rich. It’s all good. It’s a win-win situation apparently.

The idealism of Materialism (a practical anti-idealism in truth) is to get rich -- to get rich, without going to jail or getting killed by competitors in the process. Laws protect the Business Class, in most instances, from getting murdered by their competitors. Lawyers protect the Business Class from going to jail, by providing them loopholes in the law. In fact, the basis of the legal profession is to serve the rich with labyrinthine legal maneuvers designed to neutralize or outflank laws designed to require more ethical business relations. Check out lawyers’ fees lately? Who can afford to pay a lawyer today but the rich and the super-rich? Lawyers exist as a class of bottom-feeders who are paid huge sums of money to pervert American laws and swing the balance of power against social justice, toward organized crime -- the ‘winners’ in American society who get rich by breaking the laws.

Lawyers are an army of mercenaries working for the criminal underworld and the criminal overworld. Like prostitues, lawyers work for anyone who can afford to pay them. (I don’t mean to insult prostitutes, who have more honor as a class of human beings than lawyers do.)

Clearly, I am presenting the negative view of the Business Culture at this point. I am aware of, and I will also present later, the positive view of the Business Culture. The Business Culture is most positive at the beginning of an expanding Growth Season (think 1983); the Business Culture is most negative (most venal and greedy) at the end of the Business Growth Season (think 2001 and after).

Greenspan’s Crime Was Philosophical – and Spriritual.

Greenspan’s real crime was philosophical – and spiritual. He, and many other academic economists, devoted huge amounts of time, energy and intellectual resources to the proposition that the so-called Great Depression, which ran from 1929 through 1947 (some say 1942), was not inevitable, and was avoidable. If the Federal Reserve and American financial and governmental institutions at the time had only been more skilled in denial, had flooded the system with liquidity – had apparently continued to fill the empty glass for an eternity -- then the Great Depression could have seen avoided. Death could have been cheated. The Devil’s return to claim the Soul he had been guaranteed could be tricked through a form of legal or semantic maneuvering. Hadn’t the Business Class already proved that taxes were not inevitable? Why couldn’t they show the same about death, and about the the death of an idea, such as the American Dream?

This was a philosophic flaw in Mister Greenspan’s set of principles.

The flaw is the misunderstanding of the nature of the ‘positive energy’ factor – the energy to build – which Greenspan apparently felt was eternal and inexhaustible, and his belief that the ‘negative energy’ factor, the Night – the energy to disembody or to de-construct -- could be avoided, ignored, or simply negated by an excess amount of positive energy, literally, by flooding the financial system with liquidity – by borrowing and borrowing and borrowing mor money – ans spending, spending, spending.

Of course, the Bible teaches us that too much liquidity led to the Flood, the Deluge, to the destruction of the world, and to Noah’s lonely survival on the top of Mount Ararat until the end of that earlier Night-Cycle.

Alan, what you did not accept, understand or count on was the fact that ‘positive energy’ runs out, and turns, itself, into negative energy. The force that builds the world is also the same force that destroys it.

Spiritual Writing is Only Very Rarely Literal

Biblical writing can be understood on many levels. But Biblical writing is very rarely literal, except in its advocation of moral principles. The world was not created in seven days, except in the symbolic sense: seven periods of creation, stretching over unimaginable millennia. Ask any serious Jewish scholar and none will claim the Seven Days of Creation in the Old Testament Book of Genesis describe ‘creationism’ in seven literal days. Only fundamental Christians insist on a literal reading of a symbolic literature. I’m not even sure that fundamentalist Jews would argue in a literal interpretation of the creation of the world.

To understand symbolic writing, the poetic mind is needed – the dream mind – the literal, scientific, rational mind cannot comprehend symbolic writing. The poetic mind is almost always lost with mathematics and the scientific process. Likewise, the scientific mind cannot crack the code of myth. The Day misunderstands the Night; the Night is beleaguered to comprehend the Day.

In fact, it is only the Middle Principle, the Soul – Dawn, Renaissance Man; and Dusk, Romantic Man – that can understand both worlds. The Renaissance Man is moving away from Religion toward Science and the Romantic Man is moving away from Science toward Religion – but both understand that a true understanding of reality rejects nothing from the picture of wholenss, and tries to include every state of mind in its recognition of the whole.

Also, the symbolic truth embedded in religious or mythical or mystical writing is timeless, like the dream is timeless. This timelessness makes the symbolic message illuminatory for all time, including the Present Time in which we currently live. Scriptural writing, and its underlying symbolic meaning, was written, not merely for the historical time of its composition, but also as a kind of psychic map for humans living at all times. Symbolic writing, describing eternal spiritual dilemmas and principles, is a guide for spiritual survival in all historical times – is, in fact, as compelling and as relevant to the human quest today as it was to King David or to Moses in pre-Biblical times, in India, Egypt, Assyria, Australia, Central America, Asia and North America.

Spiritual writing is a biography of the soul.

Eternal truths tell us about our lives, about the eternal parts of our own lives, in the Ever-Present Time. The Flood is not just about Noah and his Ark in ancient myth – it is about us today. Nuah (the original of Noah) was a Chaldean word meaning ‘Spirit’; the Ark was a glyph for the Moon, as the Moon was symbolic of the Womb, in which the Spirit took refuge when the emotional element (Water) of Chaos and Night replaced the intellectual element (the Fire) of Order and Day – when the world ‘fell’ into the Chaos of the Flood, as we are falling into Chaos today.

Noah (Spirit) hid in his Ark (‘argha’ in Egyptian is the crescent moon) while the Darkness of Chaos destroyed the Material World. At the end of the destruction, Noah was re-born, was delivered back in to Life, the new prototype from which human evolution was patterned.

Noah is about the Night-Cycle. Noah is the Spirit living in the First Body, the Soul, the Moon, riding on the oceans of Chaos as the Night-Cycle played out is part, leading toward the rebirth of the world (the Day-Cycle).

We cannot avoid the Night, the depression, simply by pretending it is not a part of the equation. By choosing Life in the World we also choose Death. By choosing to fly high, we also choose to fall deeply. By choosing to be rich, we also choose to be poor. By choosing inflation of the Ego, we also choose deflation of the Ego and all the suffering and death which goes with the death of the personalities we have created.

There is a Middle Path, the Path of the Soul, which is not so rich, and not so poor, not so strong, and not so weak, not so bright, and not so dark – but we have not chosen that path.

The Hero chooses the flamboyant path, the path of extreme challenges – like our friend, Mr. Blankfein, suggested – those who wanted to be too rich, too ambitious, and too successful.

The Hero chooses to become God. The Hero also chooses (perhaps unconsciously) to become the Anti-Hero, the one who destroys everything the Hero has constructed.

Greenspan, after the dot-com bubble burst in 2001, lowered interest rates to flood the system with capital to avoid the necessary Winter season in the economic expansion. Greenspan lowered rates to try to fight off economic death or descent – the Big Crunch of Matter back into its seed, buried in the Earth beside the winter-stripped, naked Tree of Life.

In the process of his denial, Greenspan helped to ignite a furious national and international housing price bubble. Exotic mortgages were suddently created by bankers and brokers on both Wall Street and Main Street, which essentially allowed unqualified home buyers with little or no money to buy houses they could not afford, afueled the boom. Investment banks then helped further inflate the bubble by issuing even more exotic mortgage bonds that wrapped together high-risk and low-risk mortgages (in an attempt to neutralize the suspect loans), which they then sold to banks and other institutions all over the world as investment-grade instruments, which the rating institutions did not know how to grade, and which seemed stable and profitable as long a housing prices kept rising….

But what rises also falls.

The Housing Bubble Pops.

Bernanke’s Response Fuels Dollar Wounding, First of Two Commodity Bubbles.

As home prices fell, mortgage defaults rose. Banks holding the new breed of mortgage bonds did not even know how much risk they had assumed, because different grade mortgages were all bound up together, low-risk paper with high-risk paper.

The banking system began to implode.

Greed had trumped good judgment; and now default and bankruptcy were going to trump the seductive intoxication of a bull market in housing and the pure blue sky of Greenspan’s ‘free market’ religion.

The economic catastrophe was further exascerbated in 2007-8 by a decline in the U.S. Dollar which fueled a wild spike in commodity prices, a third major bubble that formed under the Greenspan-Bernanke watch. (Bernanke was a ‘good son’ of Greenspan, from the same school of thought, continuing the old man’s prescient policies.) Oil shot up from $60 to $150 dollars a barrel. All major commodities followed this oil spike: copper, wheat, corn, gold, silver, aluminum, titanium, heating oil, natural gas. Commodity-heavy indexes and hedge funds spiked. Suddenly Canada, Russia, Australia, and other commodity-heavy economies were markets at which professional investors threw money. But the price of doing business for almost all other businesses escalated dramatically. Companies, already hurt by frozen credit-lines attendant to the banking crisis, now had to deal with escalating materials prices. American consumers, reeling from a popped housing bubble, now sagged under the heavy burden of skyrocketing gas and fuel prices.

In June 2008, the dollar reversed, as investors sought quality paper in response to the global banking crisis; and this flight to quality burst the commodity bubble. (So much for the theory of supply and demand regulating the marketplace. Speculators had created a demand in commodities as a response to a declining U.S. Dollar. But now the investment-banking and hedge-fund giants got caught in their own trap, as the unexpected return-flight to the dollar destroyed overnight their huge profits in commodities.)

A deflating stock market, a deflating housing market, and a deflating commodity bubble cut trillions of dollars out of the global economy in a matter of months. This was just the beginning. Decades of price inflation and wage deflation had created a top-heavy tower that was crashing. The unwinding of debt wil take a generation to be accomplished.

Bernanke Leads: Surreptitious Bank-Bailout Continues.

QE: Quisling Enterprise? The Attempted Destruction of the American Dollar.

(Re-reading the above paragraph, it becomes cleaar the loop that Bernanke is caught in. Quantatative Easing is the only think Bernanke can do, without biting the bullet and raising interest rates, which is something he is philosophically incapable of doing. His entire life has prepared him for this battle: what if the Federal Reserve had inflated America and the World out of the Great Depression? He can’t go back. Bernanke’s current policies are driving prices higher – in almost everything but housing, and income . These policies are not leading to organic business growth, which they can’t, in fact. Remember: growth is by definition the empty glass filling up. Inflation is the empty glass filling up AND the full glass continuing to be filled, over-filled.

If Bernanke allows the US Dollar to rally again, then he risks another massive collapse, such as the one that occurred in 2008, when his anti-dollar commodity bubble popped and dragged everything down with it. So his policy is to crucify the US Dollar, to knock it down and keep it from getting up, which, is also a sneaky way of attempting to monetize US debts: taking on more debt but devaluating the currency to try to make such actions a wash.

Of course, now we have skyrocketing prices for food and for industrial commodities. Inflation has been exported to foreign countries through the anti-collar policy (and the spike up in commodity prices). Food riots are breaking out all over the globe. Countires are now raising interest rates to try to fight off the new inflation created by Bernanke – China is raising rates, India, Thailand; England is next. Civil wars are breaking out in about ten Arab countries, in Thailand, in Ivory Coast – violent class warfare revolts are also appearing in Greece, France, Germany, England; Greece, Spain, Ireland, Italy, Spain, Portugal – in fact, all European countries except Germany – are approaching and will face default in the near future.

This, my friend, is the Big Crunch. The Big Crunch cannot be avoided. Take it like a man: raise taxes, cut spending, raise interest rates, and become a Saver Nation. Our time as the world’s great Spender Nation is over for a while.)

Watching the collapse of the global capital markets each day in 2008 on television and through the internet was a bit like watching the attack on the Twin Towers in New York City in 2001, and the subsequent de-materialization of the two buildings: there was nothing anyone could do. The world was set on fire. People were jumping out of windows. There were enemies of civilization behind each attack – forces of Anti-Matter. The Muslim enemies of America knew they had attacked the Twin Towers; but the men (mostly white men, bankers and businessmen) who had attacked the global banking system really did not realize what they had done. That was the difference.

Masters of the Universe Greenspan, Bernanke, Paulson, and their cronies at Lehman Brothers, Goldman Sachs, Morgan Stanley, AIG, Countrywide Credit, Fannie Mae and Freddie Mac, had torpedoed the very ship they supposedly loved and on which they had served for much of their lives (or was the ship only serving them in their quest to amass millions for themselves?). They had slipped a Trojan Horse into the financial system – Collateralized Debt Obligations – a class of investment vehicle, derivatives, that Warren Buffet called ‘finaancial weapons of mass destruction’. Why all the greed? Where did the greed lead them? All for a a few more million dollars, a few more houses for their families, a few more luxury cars and yachts. There is never enough money. There is never enough power. There is never enough status. One could always go higher; one could always get richer.

“Ask my workers to be less ambitious, to be content with what they had?” Lloyd Blankfein asked, incredulous. Never!

Ask these men to police themselves? Not very likely.

These men (“Masters of the Universe”) will live in America’s Hall of Infamy for having destroyed the lives of millions of people across the globe, and for having shamed America and America’s reputation as the leader of the Free World.

These men betrayed their own way of life and their own people without really being cognizant of what they were doing (at least in one sense). They were so excited by the result they got from milking the Golden Calf that they miled the Gold Calf to death. None of these men and women really wanted to destroy the world.

At least the Muslim terrorists who attacked America in 2001 had the self-awareness of understanding they were trying to destroy America. The Muslim terrorists failed badly at their goal, although they did inflict severe, although impermanent, damage on the psyche of the country. But the American terrorists, the bankers and the greedy mortgage agents, the insurance overlords, the corrupt politicians in Washington and in the state and cities that jumped on board, inflicted a mighty wound to the American psyche, one from which it will take a generation or more to recover.

Greed knows no honor.

For this is the Day of the Lord

Yahweh Sabaoth,

A day of vengeance

When He takes revenge on His foes:

The sword will devour until gorged,

Until drunk with their blood,

For Lord Yahweh Sabaoth

Is holding a sacrificial feast

In the land of the north

On the River Euphrates.

Jeremiah 46:10

CHAPTER THREE.

READING THE INDICTMENT –

WHY WE NEED BOTH INFLATION AND DEFLATION

It didn’t have to be this way. The big mistake, in my view, came when the Fed condoned the equity bubble in the late 1990s. It has been playing post-bubble defense ever since, fostering an unusually low real interest rate climate that has led to one bubble after another. And that has given rise to the real monster -- the asset-dependent American consumer and a co-dependent global economy that can’t live without excess US consumption. The real test was always the exit strategy."

Stephen Roach, ‘The Test’

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

John Maynard Keynes

"Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of prevent- ative law, snooping bureaucrats, and the chronic goad of fear."

— Alan Greenspan

“…inflation is running at rates that are too low relative to the levels that the Committee judges to be most consistent with the Federal Reserve’s dual mandate in the longer run.”

Ben Bernanke, 2008

“Believe Me: There Is No Inflation In America Today.”

When Someone Tells you This, Don’t Believe Them.

Deflation is a necessary season in the economic cycle. Deflation is the necessary contraction phase, and helps to re-balance the excesses fueled by the principles and energies of expansion. Deflation relieves debt-congestion, through forced repayment or default, and modifies prices that have escalated during the expansion phase of the cycle. These two forces – Inflation and Deflation – work together, as Day and Night work together, as Man and Woman work together, in the relatively sane system of governance of the Earth. Day and Night – Inflation and Deflation -- only appear to be adversaries. Their adversarial relationship – like the relationship of Republican and Democrat – creates, in fact, a unity of motion. Centrifugal motion pushes energy outward from the center of a system; centripetal motion pulls energy from the periphery back to the center. This is a breathing process.

Then everything starts over again.

The U.S. government had been telling the American citizen for several decades now that there is no inflation in the American economy.

Of course, Americans know this isn’t true. Oil prices rose from $15/barrel to $150/barrel in twenty years. Housing prices jumped 150-200% in only three years, after averaging an appreciation of 2.5% per year for over a century. Health care costs exploded year after year, averaging 9.5% growth, year-over-year, for the last decade. The cost of college tuition has gone up by almost 2000% in thirty years. And we are told that there is no inflation.

It finally became clear to me, after years of musing on this phenomenon (this duplicity?), that there really is no inflation, according to government statistics, as long as there is no wage inflation. And there has been little wage inflation since 1974 – that is true. As long as wages stay low and do not chase the escalating costs of goods and services – and this is almost possible if the cost of credit stays low -- then the inflation spiral is muted – at least how inflation is gauged by (ever-changing) government formulae. Of course, the consumer, in this scenario, becomes more and more indebted through this method of paying for myriad goods and materials and service experiencing rapid price growth, not through wages, which are stagnant or even declining, but through borrowed money, investment gains, or through refinanced mortgages.

Business profits grow, wages remain low, and workers take on more and more debt. It sounds to me like a volcano that is bound to blow. But what do I know? I’m not an economist. Sometimes logic is only logic for those not sophisticated enough to understand the difference between appearance and reality.

Of course, consumers were able to offset stagnant wage growth in the last few decades because of the impressive stock market gains (the first bubble to pop, if you’ll remember, in 2000, nearing the apex and intial decline of the Day-Cycle, 2001). The stock market had become a second source of income for American consumers, to help pay for ever-increasing costs, such as children’s college education, first, second or even third homes, medical insurance and medical treatments not covered by insurance. But then the stock market flattened out after 2000, moving sideways for a few years, eliminating wall street as a guaranteed source of secondary income. In fact, Wall Street from 2000 to 2010 has been a decade of a negative return, which is what the Night-Cycle promises to the investor.

Stocks Run Dry; Housing Becomes New Commodities Market

So, how did Greenspan and his Fed respond to the clear sign of the full glass being overfilled in 2000 when the Nasdaq stock market crashed? Well, they continued to try to fill the full glass, pouring water/debt faster and faster into the full cup.

Remember, the ‘correct’ response to the phenomenon of bubbles appearing in the economic fabric (according to the Clark Doctrine) is to slowly and steadily begin emptying the glass. How does one empty the glass? By raising interest rates of course.

Did the Fed begin raising interest rates slowly? No. The Fed lowered rates drastically, hurriedly, after the Nasdaq market collapsed in the year 2000, signaling to markets, investors, and bankers that the Gold Rush was still on. America was not going to back down. America was going to fight to the death, fight the contraction – remember, the Hero does not surrender; the Hero goes down in flames.

The Fed Chair announced (he did not say this literally, of course, but did so through his actions) that he was staying in business as Chief Bubblemaker – Chief Deflation-Dragon-Fighter -- so, everyone should get ready for a war to end all wars in the financial circles. Greenspan was not backing down. This would be a battle royal. Deflation was the Devil. And Greenspan was working for God (yes, we would hear that litany again).

As a side note: This bubble-land would be where the real money would be made. Speculators must act fast; be nimble; act ruthlessly. Bubbles do pop; and no one wants to get caught out on a rooftop when a bubble suddenly implodes. Someone (probably late-comers, probably small investors) would get hurt. That could not be avoided.

No question: the Fed was pandering to risk-takers, gamblers, con-men, and to political opportunists whose creed was economic growth at any cost – because only economic growth in perpetua could save the jobs of those same political operatives (and the good life Washington had bestowed upon them) as voters would never understand the need to slow down the machine and prepare to withdrew fuel from the fire.

Of course, the Fed was supposed to be independent of political expediency so that they, the Fed, as an institution, could respond with policy that was good for America, and good for Americans, not necessarily good for any party of American political leaders. Volcker had done this in the early 1980’s. Greenspan could have done this in 2000-2001 – and did not. Greenspan chose to keep the party going.

Did Greenspan really want to be remembered as the guy who turned out the lights on the party? Not really. Greenspan (and his buddies in the Clinton Administration, Robert Rubin (former Goldeman Sachs man) and Lawrence Summers) had just been christened the ‘Masters of the Universe” by Time Magazine after their response to the Asian Currency Crisis in 1999 – was it time now to back down, to speak of philosophical necessity, and begin tightening interest rates, to give in to the Darkness?

The ‘Three Marketeers”? They look more like the current version of the ‘Three Stooges’, with the leader looking more like Mister Magoo than like Mo. We were going to trust these men to save the world? From what? For whom? For Goldman Sachs? These men are not as mild and as clean as they may look, to the untrained eye.

Who are the other two men lionized as world saviors by Time Magazine? Robert Rubin, nicknamed ‘Teflon Bob’, on our left, is a granduate of Goldman Sachs Wall Street School For Advancement and Treasury Secretary under Clinton. Larry Summers, on our right, was Clinton’s Deputey Treasury Secretary, under Reuben, and then succeeded Reuben as Secretary of the Treasury. Clinton, of course,was the first Democrat is history to actively sell his Soul to Wall Street.

Rubin and Summers were the point-men in the Clinton Administration’s effort to deregulate the banks – Summers had no real formal connection to Goldman Sachs, unlike Rueben, who spent most of his working life with Goldman (1966-1992), starting as an associate in the risk arbitrage department and ending as Co-Chairman and Co-Senior Partner, before joining the Clinton team in Washington. Clinton owed Goldeman Sachs for helping him get elected – in fact, a curious mind might imagine that Reuben was part of the COD Goldman was charging the Clinton Administration. Also, it seems pretty clear that bank derugulation was the primary bill that Bill Clinton had to pay back to Goldman (Mephistopheles coming back to Faust to collect his due, Faust’s Soul). Rubin was the mechanism -- and the link between the White House and Goldman – by which this payment would be massaged into place for Goldman Sachs.

This act, of course, made of Clinton a Judas who should go down in American history as one of the greatest traitors of Democratic principles the party has ever seen. Clinton was in bed with the party of Joe McCarthy. And he was apparently too busy with his chasing women and raping women and using cigars in playful molestation of women to notice that he, in his unwholesome dalliance with Goldman Sachs was paving the way for destruction of democracy in America. Because, after Clnton, there really was no opposition party in America any longer. Goldman Sachs and the Wall Street banks (but particularly Goldman Sachs) owned both parties and simply did what it liked.

Rubin and Summers had the job of signing America over to Wall Street. The illusion was maintained that the bill could be written in such a way as to reqire banks to treat minority rights with respect – to even attempt to use the bill to require banks to lend to minorities who really were not good risks for loans, who did not really qualify – because of salary requirements – for mortgage loans under existing conditions. The Community Reinvestment Act required that banks lend money in communities in which they did business. This turned out to be another major problem leading to the Housing Bubble a few years later. And led the banks to seek a sophistical ‘mortgage bond’ that could wrap good and back loans together in a security that neutralized the bad loans mandated by the CRA.

Clinton wanted to slip a ‘social progress, minority rights’ element into the bill that was essentially selling America to the Banking Establishment of Wall Street.

In their article “Teflon Bob and Banking Deregulation”, Russell Mokhiber and Robert Weissman write about how banking deregulation really worked.

Few top government officials, whether elected or appointed, have managed to emerge as unscathed from a half dozen years in the Washington, D.C. spotlight as former Treasury Secretary Robert Rubin. And Rubin did better than escape without scratches -- he ended his term of office with his image enhanced.

Wall Street and the financial press practically beatified him for his role in overseeing the global economy through difficult times and working in tandem with Federal Reserve Chair Alan Greenspan to keep the U.S. economy working smoothly.

Rubin helped precipitate the Asian financial crisis which has inflicted untold suffering on tens of millions, orchestrated the bailout of foreign bankers and investors in connection with the Mexican and Asian financial disasters, and crafted or helped implement domestic policies that ensured the overwhelming portion of benefits from economic growth would go to therich -- but none of this managed to sully the reputation of the Secretary Rubin.

Now Teflon Bob appears on the verge of demonstrating that his immunity to criticism makes Ronald Reagan look like he was coated with bubble gum.

When he stepped down from his Treasury post this past summer, Rubin left unfinished a legislative effort to re-write the nation's banking laws. Misnamed "financial modernization" legislation was really a deregulatory initiative -- reminiscent of the S&L deregulation that led to a corporate crime spree, the collapse of the industry and the subsequent taxpayer bailout of epic proportions.

The centerpiece of the deregulatory bill, which different fragments of the finance industry have pushed for a decade and a half, is the repeal of the revered Glass-Steagall Act, which bars the common ownership of banks on the one hand, and insurance companies and securities firms on the other.

Although powerful interests have long backed the legislation, it has repeatedly failed to make it through Congress because of a maze of intra-industry disputes, turf fights between different parts of the federal regulatory structure, and the concerted efforts of consumer and community development advocates.

Another failure seemed possible or likely this fall, especially as Senate Banking Chair Phil Gramm, R-Texas, refused to compromise on privacy and community development issues. Another failure, however, was not acceptable to one company above all -- Citigroup. Through the product of the merger between Citibank and Travelers, Citigroup was operating in apparent violation of the bar on common ownership of banking, and insurance and securities; a loophole provides for a two-year transition period.

Enter Robert Rubin.

According to a report in the New York Times, Rubin helped broker the final compromise language on financial deregulation. And while he was brokering a deal between Congress and the White House, he was also, according to the New York Times account, negotiating his own deal with Citigroup. A few days after the banking deal was finalized, Citigroup announced it was hiring Rubin as a de facto co-chair of the corporation.

Filings with the Securities and Exchange Commission indicate Reuben was paid $15 million dollars in annual salary with Citicorp, which did not include stock options for 1.5 million shares of the stock. It’s good work if you can get it.

Rubin seems to haave delivered the derugulation bill that Citicorp desperately needed and that all the other Wall Street banks, Goldman Sachs among them, had been desiring for decades. In return, Rubin’s asking price was met by Citibank. Extortion; or just business?

The Mokhiber and Weissman article continues:

This chronology and these arrangements raise serious issues about whether federal ethics statutes and informal Clinton administration rules have been violated.

Rubin told the New York Times that he was proud of his work in preserving the Community Reinvestment Act (CRA -- an important law that requires banks to make loans in minority and lower-income communities in which they do business). In fact, the final version of the bill significantly weakens CRA: there will be no ongoing sanctions against holding company banks that

fail to meet CRA standards, it will lessen the number of CRA examinations, and provisions of the bill will discourage community groups from challenging banks' CRA records. And the weakening of the CRA is only one element of the finance industry's deregulatory wish list which is included in the compromise legislation.

The bill will:

* Pave the way for a new round of record-shattering financial industry mergers, dangerously

concentrating political and economic power;

* Create too-big-to-fail institutions that are someday likely to drain the public treasury as

taxpayers bail out imperiled financial giants to protect the stability of the nation's banking

system;

* Leave financial regulatory authority spread among a half dozen federal and 50 state agencies, all

uncoordinated, that will be overmatched by the soon-to-be financial goliaths;

* Facilitate the rip-off of mutual fund insurance policy holders by permitting mutual insurance

funds to switch domicile states – thereby enabling them to locate in states where they can

convert to for-profit, stockholder companies without properly reimbursing mutual

policyholders (a conversion of tens of billions of dollars);

* Aggressively intrude on consumer privacy (and promote a still-greater intensification of direct

marketing), thanks to provisions permitting the new financial giants to share finance,

health, consumer and other personalinformation among affiliates; and

* Allow banks to continue to deny services to the poor (Congress rejected an amendment requiring

banks to provide "lifeline accounts" to the poor, so they would have refuge from check-

cashing operations and the underground economy).

Robert Rubin helped deliver this ticking time bomb of a bill to Wall Street, first while in Treasury and then while in negotiations to land a top spot at the finance industry's largest and highest-profile company. He may well escape unscathed yet again, but it is sure to blow up on the rest of us.

So Bob Rubin feathered his nest. Isn’t that what politics is about? Is it naïve to expect humans with political power not to look for opportunities to cheat and steal? What about Lawrence Summers? Was he feathering his nest also?

Matt Taibbi the Rolling Stone writer, called Goldman Sachs ‘a giant vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money’. I wish I had written that. Taibbi wrote an article of Lawrence Summers entitled “The Corruption of Larry Summers” in April 2009.

Summers, who became President Obama’s Chief Economic Advisor in 2008, had to release his financial disclosure forms in order to serve in the federal government. Summers had received about $5.2 million in fees from hedge fund operator D.E. Shaw a year earlier, and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations.

Taibbi looks at all this in his article, which he begins by quoting the Washington Post:

Obama’s Top Economic Adviser is Greedy and Highly Compromised

But Summers, a leading architect of the administration’s economic policies and response to the global recession, appears to have collected the most income. Financial institutions including JP Morgan, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.” — Washingtonpost.com

So I guess that $45,000 speaking fee from Merrill Lynch wasn’t technically a bribe because Summers wasn’t named to Obama’s economic transition team until Nov. 24 — a full 12 days later. I’m sure Larry Summers had absolutely no inkling whatsoever that he was going to be one of the key advisers to the new administration on Nov. 12.

It likewise makes perfect sense that Merrill Lynch, a company just months removed from having to be rescued from bankruptcy by an 11th-hour, pseudo-state-subsidized buyout by Bank of America, would decide to spend $45,000 on a speaking appearance by Summers because, well, they really valued his economic expertise and his proven ability to rally the troops with his stirring rhetoric.

It certainly had nothing to do with the fact that a) it was eight days after a Democrat was elected to the presidency; b) Summers had a long history of being one of the key policymakers in Democratic Party politics; and c) Merrill was absolutely not going to survive more than a few more months unless taxpayers forked over another 20 billion or so to cover the giant hole in Merrill’s balance sheet that was, at that time, still being hidden from Bank of America and its shareholders.

And how about that $135,000 appearance for Goldman Sachs in April, when Summers was already involved with Democratic Party politics again? That wasn’t a surreptitious campaign contribution at all!

But you have to give Goldman credit: it sure is thorough. It literally leaves no stone unturned.

One has to love the sequence of events here. Back in 2004, Goldman chief Hank Paulson goes to SEC chief William Donaldson and petitions to have lending restrictions relaxed for the top five investment banks. Donaldson rolls over, the restrictions are relaxed, and it’s a disaster, as the top five banks immediately overleverage themselves — two of the five, Bear Stearns and Lehman, would actually collapse, at least partially as a result of being insanely overleveraged.

In the midst of this disaster, Paulson is named Treasury secretary. He does nothing about the worsening financial crisis until it is far too late, then allows one of Goldman’s biggest competitors, Lehman, to fail while at the same time intervening on a huge scale to save AIG, which just happens to owe Goldman a ton of money.

When AIG is bailed out, its government regulator is not in the room, but the new chief of Goldman, Lloyd Blankfein, is. In fact, Goldman Sachs ultimately receives about $13 billion of the money paid to AIG by the government in the bailout, reportedly getting paid 100 cents on the dollar for its AIG exposure, despite the fact that the bank claimed it wasn’t going to suffer severe losses if AIG collapsed.

Later, another former Goldman executive, Ed Liddy, is installed as head of AIG — which just happens to get bailed out twice more, the last time to the tune of $30 billion.

The last two bailouts of AIG take place after a former Goldman chief, Robert Rubin (who, incidentally, helped start this mess by ramming through a series of i-banker wet-dream deregulatory moves as Treasury secretary for Clinton in the 1990s), is named to the Obama transition team, joining Summers (who had already taken $135,000 from Goldman that year) and Timothy Geithner (a protege of another Goldman alum, John Thain, former president and chief operating officer and notorious scumbag).

When it comes time for new Treasury Secretary Geithner to name a chief of staff, he chooses Mark Patterson, who is less than a year removed from working as a lobbyist for … Goldman Sachs. Patterson’s great contribution to society as a Goldman lobbyist was opposing a 2007 measure introduced in the Senate by presidential candidate Barack Obama to rein in executive compensation.

I remember watching Obama the presidential candidate give a speech in Mason City, Iowa, in 2007. Obama had made a big show of not having registered lobbyists working for his campaign, and he promised that lobbyists “won’t work in my White House.” The line was a hit and became part of Obama’s stump speech. I must have heard it two dozen times.

A little over a year later, he put a registered lobbyist of a bailed-out investment bank into a job whose primary responsibility is administering bailout money.

It gets worse. According to a Glenn Greenwald piece I just read, even Gary Gensler is a former Goldman employee. That absolutely blows my mind. Genlser is Obama’s choice to head the Commodities Futures Trading Commission, whose purview is the derivatives market. The CFTC was the battleground where ages ago Rubin, Summers, and then-Rubin aide Gensler teamed up to whack CFTC chief Brooksley Born, who had serious concerns about the burgeoning derivatives market, in particular the credit-default swap market. Rubin overturned Born’s recommendations, and derivatives were freed from most regulation. That economic Alamo led almost directly to the AIG disaster.

Think about this for a moment. A former Goldman chief, Rubin, presses the CFTC to deregulate a type of derivative contract whose chief benefit to an investment bank like Goldman is that it allows it to lend more — the CDS being most useful as a tool to move investment risk off a bank’s balance sheet.

Then another Goldman chief, Paulson, pushes for further relaxation of lending limits. Then Goldman jumps head first into the housing bubble, buying tens of billions in CDS protection to hedge its crazy investments. This massive explosion in lending by banks like Goldman, fueled in part by the use of derivatives like CDS and fueled still more by the 2004 change in rules, puts an enormous strain on the economy, leading to giant holes blown in its hull by the end of 2007 and on through 2008.

It follows that when Goldman’s chief partner in those CDS deals, AIG, collapses as part of this wave of crashes, Paulson — now Treasury secretary — rushes to the rescue, pumping billions in taxpayer money into AIG that is quickly funneled to Goldman. Then a Goldman alum is put in charge of AIG, while another bunch of Goldman alums funnels still more bailout money to AIG, and yet another Goldman alum is put in charge of regulating the derivatives market that is the focus of most of the bailout efforts.

In the midst of all of this, something amazing happens. Goldman Sachs, along with Bank of America, Morgan Stanley and a host of other “troubled” banks, reports a profit for its first quarter in 2009! How and why that happened is another fascinating story, for another time. For now, the only thing to remember is that all the ones who got us into this mess — Rubin, Summers, Goldman in general — are now being put in charge of the cleanup by a president who spent most of 18 months on the campaign trail pledging to end the influence of money in politics.

Add this to the obscene giveaway that is the toxic assets program Geithner has just devised (Goldman Sachs “expressed interest in participating in the plan as an investor,” according to the Wall Street Journal), and you have an amazing situation. Between the Bush and Obama administrations, you have a bailout program that has now figured three ways to funnel money to Goldman Sachs: via AIG, via TARP and now via this trillion-dollar “public-private investment program,” which basically lends huge amounts of money to investors and provides guarantees against heavy losses. It’s free money, state-subsidized profiteering at its most naked.

I hear all the time from people who complain that it’s naive to wonder why we put Wall Street executives in charge of policing Wall Street — that this is actually quite a sensible policy, because we need people with experience in that world making these decisions.

The reason people say this has nothing to do with reality and everything to do with the fact that the financial markets are intimidatingly complex. When Enron buys a seat at the table to conduct energy policy under the Bush administration, everyone knows what that is. When Reagan hires notorious union busters to run the National Labor Relations Board, everyone knows what that is. And when we hire investment bankers to run banking policy, and put investment bankers in charge of handing out bailout money to investment banks, we ought to know what that is. But for some reason we don’t seem to see it the same way, not as clearly.

In my mind this officially ends the Obama honeymoon. I can maybe see one or two of these creeps in key positions. But this many — it’s an undeniable pattern. He put William Lynn, a former Raytheon lobbyist, in the Pentagon as deputy defense secretary. A lot of people squawked about Obama’s early lean toward John Brennan as CIA director because of his role in establishing the “enhanced interrogation” policies, but to me more significant was the fact that Brennan was the former chairman of the Intelligence and National Security Alliance, which is sort of like the chamber of commerce of intelligence contractors.

Most importantly, I’m sensing in these economic appointments a kind of drearily cynical parsing of the approval-ratings situation — Obama knows he’s still flying high with the “Yes We Can!” T-shirt crowd and knows that most people simply are not going to give a shit if he packs his Treasury Department with Goldman alums and lobbyists, despite the fact that he explicitly promised to do otherwise.

This is a smoking gun, clearly, of Goldman Sachs taking over the American government. But getting back to Lawrence H. Summers, one of President Obama's top economic advisers. Summers was paid $135,000 by Goldman Sachs for a one-day visit: a seminar? A conference? That’s a pretty nice salary. Annualized, that comes out to about $35 million. Of course, that was Goldman’s way of saying ‘there’s more of that to come where you leave government also, if you continue to play ball with us’. Well of course Larry would play ball. That was why he was there, in Washington: to play ball. To get rich. Wasn’t that what life was about. Bernie Madoff thought that was what life was about.

One more thing to say about the “Committee to Save the Planet”: they are all Jewish. Greenspan, Rubin, Summers are all Jewish. Bernanke is Jewish. Blankfein is Jewish. Neil Kashkari, the Devil’s Apprentice bagman is Jewish. Madoff is Jewish. Thank God Paulson and Geithner and Obama are not Jewish, or we would have to wonder what is really going on here.

The Jews occupy a very noteworthy position in the Earth’s system of evolution. The Jews know about the 36-year cycle, divided into Days and Nights of 18-years respectively. The Jew is in the center of the Wheel of Time. The Jew is hated by the right-wing because ‘All Jews are Marxists”; the Jew is hated by the left-wing because “All Jews are Capitalists”. In truth, all Jews are nothing. There is no such thing as ‘all Jews’.

Jews are complicated, and mixed up like the rest of us, driven by forces of Day and Night to excel and to regret sins committed in the pursuit of excellence – which is another way of saying the ‘fall into temptation’. The Soul is tempted by the Devil to accept power over the Earth, power, sexual pleasure, wealth, self-indulgent self-worship. We are all tempted by this. That is what Life is about: a testing ground for loyalties to values high and selfless and values low and selfish. We love the Earth and hate and distrust Heaven; then we love Heaven and hat and distrust the Earth. That is the mechanism created for our circulation, like blood, through the body of this complex world, within which we move and live and have our being. We, too, all have existences as both Day and Night.

For every Jew working for the Devil, there is a Jew working for God. Things get complicated because one is not always sure which mountain he is climbing: the real mountain in the Air, or the reflected mountain in the Water. Or is it the real mountain in the Water, and the reflected mountain in the Air? The way we see the world depends upon the element we inhabit, and how comfortable we are in that element. Illusions abound in this journey through life. What is good and what is bad? What is temptation and what is reward?

Goldman Sachs does appear from this point of perception at about 7:00 PM American Time-Cycle Time in the water (going down) to be a cabal of conspirators working for the Devil, seeking to steal America blind, and destroy democracy in order to install a plutocracy in power in America. That is the appearance here. Goldman Sachs is not ‘the Jew’ however. Matt Taibbi, self-appointed enemy of Goldman Sachs, is also Jewish. There are Jews and Gentiles, Protestants and Catholics, Mormons and Buddhists, on both sides of the wheel, condemning each other, and also condemning themselves. The shadows they are condemning will be themselves as the Wheel of Time keeps revolving.

Of all people, Jews should be aware of the esoteric wisdom contained in the saying; “The Lord gives and the Lord also takes away.” The Lord gives power through the awarding of the covenant of life; but the Lord also takes away when the Son is sent by the Father to the Earth to re-voke the covenant, to judge and to condemn. Jesus came to Earth to cast the money-changers out of the Temple – to revoke the Day-Cycle theology that God rewards his chosen people by making them rich. The Son comes to Earth to remind those who have been worshipping the Golden Calf that the Devil rewards his chosen people by making them rich; God does not do this.

I will talk more about Israel and the Old Testament and the covenant with God and the ‘chosen people’ status later in the book, when I reflect on the Night-Cycle’s elements of rebirth.

I don’t want Neo-Nazis pointing to the this book as a confirmation of the Protocols of the Elders of Zion. However, I do want Goldman Sachs – and their web of ‘Satanic’ power influences – to understand that the sins they are now committing by doing ‘God’s work’ (God’s work in the mirror is Satan’s work) will require Karmic penance when the Time-Wheel reveals how ‘God’s work’ also has a profound shadow negating and judging the work they thought was God’s work.

This paragraph is not addressed to the Jewish cabal in Goldman Sachs only, but to all the White Anglo-Saxon Protestants (and the other groups, black and white and in-between) whose greed and the power that this greed (and other forms of hunger) bestows upon them seems remarkably like Satanic worship when viewed from the light of the shadow, from the perspective below the equator, looking up. We remember that the Nazis were convinced of their own divinity. Man’s sense of his divinity, when it becomes a personal directive to absolute power, appears and possesses the human soul right before the man begins his fall from grace.

Crimes against humanity – and stealing money from the world’s poor is a crime against humanity – and undermining a democracy in order to gain more control over the political processes that lead to more personal power is also a crime against humanity – waging war in the world in order to expand business opportunities for oneself also – these crimes are not forgotten.

The 1960s and 70s Counter Culture wars against the Establishment will come again if the Establishment continues to pursue willful, selfish goals in an isolated context of ‘what I want’ and ‘nothing can stop me from reaching my dreams’. The human being is born with a strong Ego. The Ego is actually a war against Death, a war for survival. As long as the Ego views himself as alone against the world, struggling for survival in a dog-eat-dog world, where ‘only the strong (and the self-centered) survive’, then we will continue to be savages fighting for a dwindling piece of meat.

The I-centered world (eye-centered world) runs from Death, is motivated in its deepest parts, by a fear of Death, a fear of Darkness, a fear of poverty and powerlessness, a fear of being small again. If Death is not feared, then many of the crimes against humanity that are the legacy of this fear of Death, vanish. If Alan Greenspan had simply begun to raise interest rates after the 2000 Nasdaq bubble crashed, then all the crimes and sins committed after 2001 would not have happened – and we would not be mired in the worst depression the world has ever seen, only half way through but still not comprehending what we must do to resolve the imbalances of our natures which is causing so much stress and chaos on the Earth.

Bankers had always been known in America to be conservative and careful with money. They had dressed and acted the part. Bankers were boring; but that was a good thing. One could trust them with his money. Bankers didn’t have enough imagination to be criminal or even dangerous. But that era was over apparently. Fast money, big money, was now motivating the banking sector. They were dressing in Italian suits now, driving Italian cars, taking dope and living large.

Banker’s had a new anthem – not It’s A Wonderful Life any longer, but Bonfire of the Vanities and American Psycho. I am a Master of the Universe: ‘Hear me roar!’

America had a new anthem too: the new heroes of the age were ‘risk-takers’, entrepreneurs, speculators: those who dared. Anthony Robins, the giant self-image salesman, could teach anyone how to make millions off of nothing but a ‘concept’ – image-worship. Just copy successful people in their life-styles, how they act, how they walk, what they eat, how they respond to certain challenges or certain stimulus. Get rid of yourself: mimic the surface conditions of someone else’s life. But, by all means, live on the surface: afterall, the good life was like a magazine: flat, glossy, and manicured: plastic. Anthony Robins was the physical manifestation of the Nasdaq Internet Bubble: attractive idea, style, style, style, and no substance; completely empty…. That was what Americans needed to become too. Hollywood had sold them that image for nearly a century. Good surface living. Life was like a new suburban housing development: new and shiny; rich and super-cool.

John Kenneth Galbraith understood this change: “Speculation on a large scale requires a pervasive sense of confidence and optimism and conviction that ordinary people were meant to be rich . . . Such a feeling of trust is essential for a boom. When people are cautious, questioning, misanthropic, suspicious, or mean, they are immune to speculative enthusiasms.”

America had come to deify the con-men, the fake fast-talking ‘developer’, the shallow procurer who was going to make everyone rich. Nothing really mattered much in this world except ‘the con’.

When the Nasdaq gave out, ‘day-traders’ moved over to housing. And the banks quickly bent over, because ‘it was all good’: everyone was getting rich.

Suddenly – encouraged by the Greenspan Fed and by the banking/real estate cartel that was taking over America -- housing became the new gold mine, the next secondary pipeline for wealth generation for America’s ‘underpaid’ workers, after the collapse of stocks.

As housing prices began to appreciate -- much more than the annual historical average of 2.5% -- and interest rates continued to fall – Greenspan clearly loved playing the role of hero -- consumers rushed into the housing and housing refinance gold mine markets. Suddenly able to refinance existing mortgages at lower rates, to borrow against the equity of their homes, taking a stack of cash home with them to spend as they wished, most Americans jumped in with both feet.

Stocks, in fact, would be negative from 2001-2010: another negative return for the first leg of the Summer-Winter Non-Growth contraction (Night-) cycle.

Of course, the housing bubble, in most cases at least, increased American consumers’ indebtedness. While some Americans did use cash gained through refinancing to pay down existing mortgages and increase equity, or even credit card debt, most needed this infusion of cash just to stay above water as prices of goods and services continued to rise. As long as home prices continued to soar, the system seemed fine. Refinancing meant Americans could continue to draw on their increasing real estate wealth. The housing bubble generated a kind of ATM-machine phenomenon for Americans addicted to shopping and to debt. As one rolled over debt from one credit card to another, now American simply rolled over debt from one mortgage to the next, believing, all the time that the wonderful, thrilling debt roller-coaster ride would never come to an end.

Some Americans also used refi cash to buy second or even second and third houses, since loans were becoming now much easier to get; exotic loans that required no money down and even, in some case, no proof of income, were created by the banks to sustain this debt bubble as long as was possible. In a crazy red-hot upside housing market, homes could be flipped like pancakes for profits even when one could not afford the mortgage payments for the new houses for more than a couple months.

Other Americans, some of whow knew they could not afford a house, were now being told that they could qualify for a home-loan. There were now new mortgages designed for people who had no money and would never be able to pay off their investments – here’s the money; better take it while you can.

Housing truly became a kind of commodities market too, reminiscent of the Dot Com Nasdaq market, wherein internet companies with an idea and three partners and no employees and no office and no real product (but with a ‘great idea’ and a web-page) suddenly became worth billions in market value over night.

Day-trading was transferred from the stock to the housing markets.

The focus was on fast trades: getting in and getting out, and riding the dragon up the mountain.

He who hesitated was lost.

Last one in was a dirty bugger.

Madness. Yes, the Night-Cycle is about madness, about the eperience of madness.

Madness in stock market, housing market, and commodity market appreciation; and then the depreciations that followed. Madness in politics; madness in love; madness in religion.

Someone close to one always dies in the Night-Cycle also, as a reminder that objects and objective inflations of fantasy and ecstacy are finite. Death’s gravity is also there, waiting to pull the world back down to the Earth.

Classical literature always referred to the lunar madness of these Night-Cycles – literature overflowed with this understanding. This phenomenon certainly was not a new.

“It’s different this time’ Wall Street innovators understood. They preached the new religion. ‘It is different this time. It’s all good – this time.”

This growing paper wealth for most Americans was being fueled by a dubious policy of serial bubble-creation that cheapened real money and turned millions of Americans (and world citizens as well) into debt-slaves and credit-junkies. The Housing Bubble was a global phenomenon, as world banks, trying to keep up with dauntingly successful American bankers and bank policies, had to either get on board or get out of the way. Most got on board, the lure being the fabulous wealth promised for the bankers themselves, glory, and glamor. Temptation is a sultry dragon; and it was time to feed the beast again. Hadn’t Gordon Gecko said it: “Greed is good; greed works?”

The dogma of unlimited growth and unlimited wealth was being bruited about by the same bankers and financiers and entrepreneurs and legendary Wall Street ‘risk-takers’ – and Fed Chairmen and Treasury Secretaries and U.S. Presidents -- who were laying the groundwork for the destruction of America and Europe, and all the other ‘emerging’ nations of the world that could not wait to jump on this miraculous bandwagon of capitalism.

Everyone was getting rich. This was a ‘Just Do It’ generation. “It’s all good” – that was the motto of the era.

Charts of debt accumulation by American consumers, however, show pretty clearly that the ‘phantom’ inflation of prices was fastly, vastly accumulating on American’s credit card accounts.

Strategies to Cope with (Nonexistent) Inflation

Another way in which Americans sought to keep up with accelerating costs of living was to have both adults/parents working. Of course, women’s liberation doctrine called upon women to pursue careers in the real world and diminished the role of women as home-makers and child-rearers. But most Americans were not influenced by this radical ideology of gender equality as much as they were simply by the desire for more and more money. And most Americans – especially traditional Americans raising a family -- were influenced by the need for two incomes to try to keep up with escalating prices.

There was, of course, a dramatic and negative reaction in the life of the society to this ‘careerizing’ of the American family. Divorce became the norm, drug-use accelerated; delinquency became pandemic.

Many readers will argue that America is the greatest country in the world, the richest, the freest. Yes. But something was wrong in America, and still is wrong. We are still building prisons at a rapid (inflationary) rate. The number of incarcerated Americans has increased 960% since 1950. Two in three marriages fail.

In our greatest symbol of moral bankruptcy of this age, our children began taking guns to grade schools and high schools and colleges and shooting fellow students and teachers indiscriminately.

Life must be about more than just making money, just participating in the Gold Rush. Money was flowing; but not everything was right in America.

More cheerleading of America by lords of the financial press – whose livelihood depends upon Americans throwing money after bubbles -- more honoring of the world’s Donald Trumps as exemplary heroes and role models (and the many other entrepreneurs and fast-talkers and shysters and ‘risk-takers’), and more ‘keep government off the backs of business’ slogans, bumper-stickers, and philosophies of life -- will not address America’s real social decline, and the declne of the American family. Much of this decline comes from the inflation of costs of goods and services in the American economy, bubbles created by the positivist ilk like Misters Greenspan and Bernanke and the implicit misconception that the American Dream is only about making money. Our values are skewered. Greed has become a virtue. Worldly success has become a test of one’s will to be self-centered enough and cruel and cold enough (resolute is a better word, I guess; ambitious is another good word) to be a ‘winner’, to be ‘Number One’.

When I grew up – I was born and raised in a small town in Wyoming and educated early in a Catholic school -- greed, worldy success, worldly pleasures, and worldly power were temptations of Man by a Devil, temptations that the man needed to resist or somehow spiritually neutralize. By implication, being a ‘winner’ apparently involved a kind of spiritual contract with the devil, something that would cost a man (and, by inference, a society that worshipped the values of such worldly ‘winners’) his (and their) soul, after all the glory began to evaporate.

Who is the God and who is the Devil?

Today, in our ‘modern’ existence, these values as ‘world-conquerors’ are considered virtues, positive goals, attributes and dreams to be achieved. To be a ‘loser’ in the ‘real’ physical world was a high virtue to the medieval religious mind indicating a Soul that had defeated temptation, a Saint, a man of faith and honor and truth; but such a triumph was now transformed into a horrible shame, for an individual and for his family. Being a ‘star’ meant being in the spotlight, having a ‘real’ life. Being rich, famous, powerful in the world of men: this was everyone’s highest ambition. In fact, many Americans would do almost anything, commit crimes, sell one’s soul even, in order to be admired by the world as being a winner, as being ‘Number One’.

A subtle change also happened to religion. The medieval view that the Devil ran the Earth, and God ran Heaven – that worldly success implied a contract with the Devil – was twisted into a modern view: being rich and famous and successful and glamorous was now a sign that God was pleased with one, that God wanted one to be rich and famous and perhaps even ruthless in business and perhaps even capable of a selfish, God-like will-to-power, will-to-glory. Now, suddenly, God rewarded Man for his selfish devotion to himself, to his dreams, to his single-minded exceptionalism, and his disregard for spiritual ideals, which were illusions meant for the minds of children, the ‘dream world’.

The beast is subtle, we had been warned.

“No guts no glory” we had also been warned. This was a Modern warning. But what was glory anyway? Was glory the Hero’s path; or was glory the ultimate vanity that led one straight into hell, the hell of utter loneliness and loss? Or was it both?

Jesus Christ, clearly, the man who fell to Earth 2,000 years ago, the Son of God, would be a ‘loser’ in today’s lexicon, a bum, a failure, the chaff, who deserved no respect and clearly had no self-respect – where was his will, his self-respect, his entrepreneurial spirit? If he was really the Son of God Jesus would be as rich as Croesus, wouldn’t he?

In the language of the Old World, America had been dancing with the Devil, whereas we were convincing ourselves that we were actually been basking in God’ blessings. Everyone in the world wanted to live the American Dream, the American lifestyle of money, power, and glamour – didn’t they?

Hollywood. Living in a magazine. Life was beautiful and glossy in the magazines. Successful people clearly wanted to live a life that was beautiful and glossy.

The Devil, in this modern view, became the social ‘loser’, the Shadow who fails, who does not work hard enough, who is not selfish enough, who is not ambitious for worldly power. Dark-skinned, lazy, artistic, unmotivated, the one who could not master life, who used drugs, who liked sex too much (or didn’t like sex at all), who did not pursue social responsibility and did not trust marriage, family, religion or government.

The Devil was essentially the anti-Hero. The loner. The romantic – he who did not trust or enjoy the company and share the values of other humans – humans whom the loner viewed as having small lives, small ambitions, small perceptions, who were materialistic and lacked real vision, were mesmerized by images, the unreal world, and by small victories, and by trying to please those in the external world, the world of phantoms, the ever-changing world where nothing endured. The world of eternal values was not the same as the world of disappearing and changing values. The world of eternal values was God’s world.

God was found within, not without, not in the world of Man, not in the world of changing styles and changing creeds and fashions. That was the Devil’s abode.

One can see, through this mirror-image opposition, how incarnantion reverses one’s perspective of virtue, making selfishness, moral isolation, greed, criminal activity to achieve a singular purpose (wealth, fame and power), a virtue, a pursuit of God-like power. Desire for God-like influence, God-like wealth, was our primary driver, the fuel of our Will that we used to achieve something great (something admired by the entire society, and by the world).

Expansion and morality do not always move in the same direction apparently. Expansion and Soul-Awareness are often adversaries, in fact. That’s why the Night-Cycles are built into this process, so that the Soul is not forgotten for ever – so that the Soul is not lost for ever. The Soul is what soothes and saves the fragmented Day-Cycle mentality when this umbalanced force falls into the horrifying Night-Cycle chaos that is always accompanied by a profound loss of identity as the controlling Day-Cycle mentality breaks and comes apart at the seams, breaking into small magnified pieces.

Of course, this ‘disagreement’ in moral values and spirituality is the guiding force and mechanism of the duality that makes of Day-Cycle adherents the mortal adversaries of the Night-Cycle adherents. One theology builds the world; the other theology dismantles the world because it is corrupt and built by Man, apparently in opposition to God’s plan.

Living the Lie of Material Success

Loans, second and third jobs, refinancing of mortgages, dependence upon an inflated stock market gains, credit card abuse….these all helped to create a consumer who was over-extended (over-expanded) and susceptible to bankruptcy should any of these expanding currents of equity dry up suddenly. And that is what happened in 2008. Now, it seems, every current of emergency, ’secondary income’ had begun to dry up at the same time.

With the saving rate at historic lows, most Americans are one or two paychecks away from bankruptcy and a life on the streets as a homeless non-statistic.

“Serves them right”, the rigid, fixed Day-Cycler will say. “If they don’t know how to live, they should be swept away. The government shouldn’t save them from their folly. That’s evolution. Survival of the fittest, and all.” Yes, as long as the speaker is really certain that he is on the right side of this fitness that is. But that is never so certain. Many of the same people who voted for Reagan and Bush also voted for Obama. They were certain they were going to be millionaires; then, suddenly, in 2007, they were just as certain they were going to be impoverished.

But there was welfare for the banks and for General Motors, Ford, AIG, when they fell – and Goldman Sachs – AIG seems to have been at the top of the list of bail-out targets since they owed s significant amount of money to Mr. Blankfein and Goldman Sachs. Apparently AIG ws doing ‘God’s work’ also.

Big Money seems to have no problem with corporate welfare. They just don’t like private welfare more some morally elevated reason. They don’t want other people being helped. They just want ‘producers of wealth’ – the Masters of the Universe themselves --to be helped back up if they fall down from the sky.

If my research is correct, all men fall from the sky. That is part of Man’s job description: to swim, to fly, and to fall from the sky.

Republicans make icons to the concepts of individualism, traditional religion and nationalist patriotism. Democrats sing the praise of the so-called international community, fairness and equality. To Republicans, the ideal of Globalism – and we should not forget this – was and is tied to the goal, in America if less-so than in Europe, of controlling business costs by driving down Big Labor’s wage demands – that is, by destroying the power of American labor unions.

‘Globalism’ was a positive-spin-word for maximizing profits by exporting high-wage jobs to third-world countries, first Mexico and South America, and then to Asia, transforming these high-wage ‘American’ jobs to low-wage ‘emerging-market’ jobs, without benefits, reducing costs for the corporations and increasing their profit margin. Higher profit margin meant higher stock prices (and more valuable stock options for company offiers) and also meant higher bonuses for company managers as a sign of ‘job-well-done’ at the end of the fiscal year.

The corollary piece of this puzzle was to maintain the First-World’s role as primary global consumer of manufactured goods. But how could Americans and other First-Worlders continue to buy mostly-unnecessary consumer goods if their own salaries and wages were decreasing? That was a problem.

Debt was the answer. Easy debt. Hell, it didn’t really matter if Americans defaulted on their debts, as long as they continued to buy mass-produced consumer products. If borrowers defaulted on loans, that was someone else’s problems. Maybe the banks could get the government to bail the banks out if defaults threatened the existence of the banks. That was someone else’s problem.

Big Money began to focus on ways to neutralize bad debt. If bad debt could be bundled with good debt in the right ratio, then the good debt might balance the bad debt, thus, neutralizing it. Investors could buy securities that essentially did this – like buying a neutralizing-risk bond, which carried a value that was somehow greater than the sum of its parts. There would probably be a Nobel Prize waiting for some ingenious student who could develop the formula that balanced solvency against insolvency in a profitable admixture, turning toxic garbage debt into a silk purse – talk about your alchemy.

The modern Western consumer was moving toward a condition of credit serfdom, in a modern, plastic context, at a very rapid rate. Someone would fix this so that everything would work out fine. The First World standard of living would not be affected by this new system of borrow and spend and forget about solvency. No one really seemed to think that debt was dangerous. Nobel Prizes had been given out to economists who claimed that debt did not matter. Spend, spend, spend: it was good for society to give up the concept of self-restraint. Self-restraint would impoverish the world. Self-restraint was an understanding of borders, or limitations – self-restraint was ruining the world in an economic sense.

The words discipline, self-denial, restraint were being deleted from the vocabulary.

Saying ‘no’ to oneself was apparently a form of madness; no one wanted to be the killjoy, or the nerd, who rained on the ‘It’s All Good’ Parade. Don’t remind us that we are sinking into monetary quicksand. Self-indulgence was best. Financial quicksand was not real anyway. Financial quicksand was an illusion.

“It was all good.”

Greed was good too. Hadn’t Gordon Gecko said it was? And wasn’t Gordon Gecko a real hero, a real high priest, of the ‘It’s All Good’ era?\

Greed works. Greed is good.

As long as matter kept expanding, the future would be bright – expanding matter and a bright future were always connected; perhaps they were the same thing. Perhaps expanding matter created light. Now there was a concept.

Everything would be fine. In fact, wouldn’t matter always expand? Modern physics had its proponents of this understanding, claiming that the universe expanded for ever. If Greenspan and Bernanke had studied astro-physics instead of Economics, they would probably have been part of the ‘ever-expanding’ school of thought.

Would the universe just keep expanding, for ever? Well, maybe not.

Matter expands until its density, and the gravity created by this density, becomes so great that it can no longer hold the expansion (the force of out-breathing reaches its maximum strength and extention at the perimeter), implodes, collapses back in on itself, and begins contracting, destroying matter as it recedes, drawn ever-closer to the black hole horizon, in which black hole anti-matter waits to destroy matter on contact –as the bubble returns to zero, the seed, pure condensed energy.

No one wanted to hear about the dangers of the housing bubble. No one wants to hear that the universe is both expanding and contracting, at the same time, either.

Many writers, in truth, were writing about the Housing Bubble and the dangers it posed for the global economy. Alan Greenspan couldn’t see it – but hundreds of writers in the world could see it, and many were warning the world of the dangers, this as early as 2004.

But these writers were dark, complainers, losers; they tended to focus on the negative side of things, always seeing the ‘problems’, never the ‘solutions’. Everyone was getting rich. There was nothing to worry about. Things were just going to get better and brighter all the time – you could ask anyone. Ask Alan Greenspan. This time things were different. Alan Greenspan was even encouraging Americans holding AAA mortgages to junk those restrictive mortgages and jump on-board the sub-prime market to get more out of their mortgages and ride the new sporty, modern mortgages that were changing the world and saving ordinary Americans millions of dollars.

Everything was just going to get better and brighter.

Of course, when something sounds too good to be true, it usually is.

And, some times, what’s good for business is not good for America.

The ‘free-market’ idea, which had dominated the American political landscape since 1983 or so, has apparently finally run its course. We are beginning to see the underside of this doctrine, the shadow-side, the ‘sin’ side. The ‘free-market’ system is very good for the owners of the world – for Big Business – but it is not always so good for the rest of us.

Sometimes what was good for Big Business is also not good for citizens of the world. Walmart – the favorite liberal whipping boy – the ‘socialists’, who are the favorite whipping boy of the conservative Repuglican -- has a dismal record all over the world for abusing its workers through low wages and insubstantial or no benefits. In China, Honduras, Sri Lanka, and other countries, workers are required to work long hours (8AM to 10PM), 7 days a week, 365 days a year for less than $3 a day. A toy that Americans can buy at a U.S. Walmart store costs $14.96 but costs Walmart only 18 cents to manufacture, because of its mistreatment of workers in China.

Business that looks the other way when workers are misused, abused, cheated or used and thrown away is unethical and should be criminal. Business that shows no legitimate concern for the quality of the environment which they use and abuse for their own profit, leaving behind ‘toxic debt’ (debt in the karmic sense of the word) for all life on Earth to absorb and be disfigured and destroyed by, is criminal and soulless.

Business that puts profits above every other concern is immoral. They are also un-Christian.

Are Modern Americans, Modern Capitalists, Really More Roman Than They Are Christians?

I emphasize the word ‘un-Christian’ because – and this is my belief, not the results of scientific investigation -- the vast majority of American business leaders who consider themselves ‘Christians’ also see wealth as a sign of God’s blessing, Gods rewards humans with money, power, comfort, and pleasure for a life lived well, within the moral constraints prescribed by Christian theology. The majority of these rich Christians also (I am surmising again) feel all is fair in business warfare, including the skewering of potential or real business competitors, the underpaying of their own workers – the Walton Family is probably ‘Christian’ also – and probably subscribe to the business world-view of ‘dog-eat-dog’ and ‘anything goes in love, war and commercial advantage’. But these ideas are decidedly not the ideas, the substance of the philosophy, preached by the founder of Christianity, Jesus Christ.

In fact, the conservative Christian right, which seems to share an abhorrence of government assistance for poor citizens, health-care as a right guaranteed by the American government, and seems to embrace the ideas of a racial and/or a national exceptionalism, are not following the doctrines of Jesus Christ; they are following more closely the doctrines of the Old Testament, the religious system that Jesus was trying to reform, and the religious power structure that arranged for the Romans to murder the dangerous, radical ‘prophet’.

Prophets seek to overthrow the system, seek to pull the Sun down out of the sky, and cast a people, a society, into the world below, through the gaping gates of Hell. Prophets endanger the comfortable life of the people in power. Prophets predict disaster for the society, a disaster that the society deserves – according to these prophets, who act out of allegiance to God’s commands -- because the society has forgotten God, has embraced the Golden Calf and has forgotten the reaal religion of the Soul, the religion of the Son. Prophets appear and inform common citizens that God is angry because of the current state of affairs. Prophets are often killed by the conservative orthodox religious adherents – the Day-Cycle principle clinging to its own prerogative – indeed, the world has been good to them – because the prophets are dark anti-heroes condemning the decent people, the heavenly creatures, to a term of imprisonment in the lightless Winter World – the Night-Cycle. The prophets are leading the society into and, ultimately, beyond the Gates of Hell. The prophets ultimately get the society through the Night-Cycles – because only the prophets can see clearly in the Night-Cycle – prophets (remember Moses) do not go on to the New Eden with their followers. There is no place for them in the Day-Cycle world – but they are the saviors of the race when the light falls and blindness settles on all.

I will spend a lot of time later in this book on the nature of the Prophet as an embodiment of the Darkness (as a mask worn at Night by the gods). The fact that profits and prophets are connected by sound is also something that we will examine a bit – words that sound alike are alike, reflect one another, as the Night-Cycle also reflects the Day-Cycle.

In fact, right wing conservative Christians should not rightly call themselves Christians, but perhaps Jehovites, or Fundamentalist Anti-Christians. They are more like the Romans who killed Jesus Christ than they are like Jesus Christ.

The fact that Jesus Christ died attempting to reform traditional Judaism – as I have suggested, he was God’s ‘prophet’ killed by Judaic fundamentalists (a murder carried out for political reasons by the Romans who wanted peace in their colony) defending the Old Testament ‘Fatherland’ against ‘the Romantic Son’s’ rebellion and attempted reformation of the corrupted (practical) Old Religon – seems to suggest that the disposition of the conservative Christians toward a hard judgment against fellow humans and a fanatical defense of tradition and the status quo (read: their own advantage and power, whether real or only imagined) suggests they would probably oppose the philosophy of Jesus Christ today were he to return to Earth espousing views similar to those who pronounced two thousand years ago in Israel.

They would probably be the ones to drive in the nails.

Right-wing Christians are more Paulians, in fact, followers of the Apostle Paul, than they are followers of Jesus Christ. Christ preached tolerance, generosity, love, peace – Jesus was a loser, poor, humbled, despised by those in power. Jesus was a non-political socialist in fact -- in today’s vocabulary, a humanist – a Night-Cycle personality: prophet, priest, poet and lover. Jesus was an Anti-hero who did not marry, as far as we know – although there are stories about Jesus and Mary Magdelaine being lovers -- did not have children, spent most of his time with prostitutes, thieves, degenerates, the world’s afflicted, clearly did not hang out on Wall Street, having power-lunches with the Big Boys; Jesus was more comfortable with the ‘losers’ of the world than he would have been with the world’s ‘winners’, the power brokers, the bankers, the politicians, the lawyers and the empire-builders.

Jesus was cruficied by Day-Cycle adherents, fascist followers of the state, of order, of law, of rigid, literalist religious doctrine.. Fear of the Darkness drives the Day-Cycle because the Darkkness does make an attempt to murder the Light during the depths of the Night-Cycle (remember Herod and Jesus?) I will show this later in the book through my own experience in 1983. The spirit of conquest drives the Day-Cycle mentality, at least partially, because of this fear that the Darkness is criminal and dangerous and wants to destroy the life of the Light. Which it does -- and does not -- another half-truth in fact.

Now, I don’t judge these parts of our natures -- the Renaissance ‘Builders of the World’ nor the Romantic ‘Destroyers of the World’ – I try not to judge them. I am both Paulian and Chrsitian too – both Julius Caesar and Jesus Christ -- both (Old Testament) Jew and (New Testament) Christian. In truth, I am a Roman by Day and a Christian by Night. An amoralist worshiper of the Will by Day; and a defender of the Soul, a defender of the power of Love, by Night – as we all are: as every one of us is: we play all the roles in the calendar of Life; but Time divides us in to one role, at any given time, against another, against our self.

All violence, in a very real sense, is violence against our selves. This is the Judgment Seat.

All kindness, is also, essentially, a forgiving of oneself, a generosity toward one’s self. This is the Mercy Seat.

The Day-Cycle is the Judgment Seat; the Night-Cycle is the Mercy Seat.

Judgment Seat (Day-Cycle) and Mercy Seat (Night-Cycle)

It is my view that all humans have dual natures, Day-sides and Night-sides, and ‘become’ each side during different periods of their lives. For some this transition is very subtle – times they are on the ‘fathers’ side in defending their own traditions, their nation, their family, alienated from modernity and from too much ‘feminine’ understanding – at other times they oppose the old ways, find traditional narrowness suffocating and archaic, and too literal, inhibitors of imaginative living and freedom of expression. In the Jewish mystical terminology, sometimes they sit in the ‘Judgment Seat’, and sometimes they sit in the ‘Mercy Seat’, the right and left paths that interweave with the Central Pillar of the Tree of Life.

Jewish mysticism has given us a picture of the Day-Cycle and Night-Cycle Principles, in their diagram of the Tree of Life. A more modern version of the Tree of Life (as a subway map) is also included. Greburah, Strength (or Judgment) is on the Right-Hand Path (or the Left-Hand Path, depending on one’s perspective); and Chesed, Mercy, is on the Left-Hand Path (or is it the Right-Hand Path?). Note: there is a right-hand path, a left-hand path, and a central path that synthesizes the two extremes. Tiphereth, the Principle of Beauty (or Balance) is situated in the Middle of the Tree of Life, surrounded and protected by Judgment, Mercy, Splendor and Victory – these four being, in one sense, the Four Guardian Angels protecting the Ark of the Covenant, the Tabernacle or Holy of Holies of the Temple.

Tiphereth is the seat of Michael the Archangel. Michael the Archangel (‘He Who Is Like God’) is to the World of Angels what Jehovah is to the world of the Gods, the Elohim – unified, impregnable. I will make the argumentlater in this book that Michael the Archangel is Jesus Christ in Heaven as Jesus Christ is Michael the Archangel when on the Earth – that these are, in fact, the two sides of the nature of the God/Man Jesus Christ.

Kabbalistic doctrine and mystical religious understanding (Wisdom/Chochmah) the left-hand path, the same side as Mercy, is very much a reality of the Night-Cycle, as Understanding (Practical Understanding, Binah) and Judgment are principles guiding the Day-Cycle.

The Crown/Kether, of course, is the summit of the mountain – but the Day-Cycle and the Night-Cycle will not agree on whether this mountain is the apex of the Day or the apex of the Night. This is very much as we could expect it to be.

One should clearly view these diagrams in the same spirit (with similar and different, and additional, meanings) as the diagrams I have generated of the Trees of Life (Day-Cycle and Knowledge (Night-Cycle) – the first, rising into Life, the second falling into Decay, Death and Re-Generation.

The Mental Division of the World Into Good and Evil is the Basis of Mental Illness.

As I have suggested, most humans defend one side of this dual nature almost exclusively – which they consider their ‘real’ nature, the ‘real’ world part of themselves – in a fixed attachment to the self-image with which they are most comfortable, or of which they are less fearful -- and they repress the other side. They attempt to repress ‘the other side’ politically; and they attempt to repress ‘the other side’ of their own nature, the sinful side, the weak side, weak physically or morally, the black side (black with sin), the unsuccessful side, the criminal side, the shadow side, the limp-wristed side, the artistic side, the ‘loser’ side, the ‘body’ side or the ‘spirit’ side.

There is a tendency to repress the opposite – to keep the ‘devil side’ locked up out of sight, in the dungeon, where no one can see it -- but such repression is, in truth, the cause of mental illness, and also the cause of social enmity, civil strife (and family discomforts) as well as universal warfare.

Alienation from oneself as a whole being – that is, the breaking of oneself up into competing parts, some virtues, others vice, warring entities -- is mental illness. Being ‘whole’ is, in fact, being sane -- the very fragmentation of the whole nature into separate stations and isolated atoms is the psychosis. Such a state, of course, brings madness in to the world.

Wholeness – a return to our original whole nature, cyclical and circular –is the only cure to all modern forms of mental illness. Exorcism is an ancient ritual to attempt to weld the Time-fragmented psyche back into the whole jigsaw puzzle again, which was the origin of life, and is also the destiny of life – both the Past and the Future, toward which and from which the Present is persistently traveling.

Madness is a spiritual problem and must be cured by spiritual re-construction of this whole nature – ancient and modern, masculine and feminine, scientific and religious, poetic and pragmatic -- which is our strength and our eternal sanctuary.

The Medieval Adam, the First Man, the Spring, the Renaissance Man, and the Medieval Second Adam, the Last Man, the Autumn, the Romantic Man, are these complete beings, and are, themselves, the Sanctuary, Tiphereth, the Center of the Tree of Life, the Ark, where Noah, the Spirit, spends the Night, floating on the Sea of Chaos, in the presence of Michael the Archangel, the Angel of the Presence.

As I have suggested, each man has a Day-Cycle nature, and a Night-Cycle nature. One side often dominates. Few men come to master the art of balance or beauty. Incarnation is a concept that denotes the loss of wholenss, the loss of balance, and the polarized expression of allegiance to one side of this dual nature over the other, and attempted suppression of the opposite.

I do not see the religious right as my adversary. They have a positive side – although it is very hard to see this side (one needs to ‘remember’ this side then when seeing the light is not possible) when one is living through a Night-Cycle, on the dark half of the Earth.

Remember, the polarized man sees only two of four moral dimensions: his own virtue, and his ‘adversaries’ vice. In truth, the religious right has a virtuous side, and I agree with them in many of their views. During the Night-Cycle, I see mostly their intolerance, their lack of imagination, their fear, their small, parochial world-view, their hysterical opposition to ideas of ‘socialism’, tribalism and naturalism – and fear of losing power to the dark forces that inhabit the Night and gain power during the extended Night-Cycle periods.

I was born and raised, as I have written, in a small town in southern Wyoming, Sinclair, and most of the people with whom I grew up I could describe as being of the religious right persuasion. These were among the best people I have ever known. My own father was a conservative politically, and the best man I have ever known – my mother was a liberal Catholic democrat.

Sometimes, in my family, my father was right; sometimes my mother was right. The Earth is ruled by the Sun during the Day; and ruled by the Moon during the Night. This is the ultimate rational system, in fact: a sharing of power between the men and the women, between the Day and the Night, the Sun and Moon, which is the basis of the ideals of democracy: two poles of antagonistic perspectives agreeing to share power, understanding that the balance of power and Life are, in fact, the same thing.

As Above, So Below

In the first part of this book I am focusing on the principles of duality and, especially, the philosophical system of Dualism, expansion and contraction, inflation and deflation, heat and cold, Day and Night, and how these processes govern history. This part is the Macrocosm, the large systemic view.

In the second part of the book, I will focus on my own experience as I lived through the last American Night Cycle, 1965-1983, and how these different stages of decline followed by growth, while occurring in the society at large, also occur in the lives of the individual cells or atoms that compose the society. I intend to focus on my own manuscripts I wrote during these ‘ages’ as proof of the transition from Day into Night and then back into Day again.

I will focus on my own ascent from the very bottom of the Night-Cycle (1983) – my resurrection in a skin that became whiter and whiter as I climbed the mountain of Olympus – my skin became darker and darker as I climbed down from the Solar Day Cycle from 1965 to 1983 -- toward the apex of white civilization, individuality, material power, scientific reason, masculine hierarchy, which peaked, and then began declining, in the year 2001.

I, too, was conservative and religious in a more fundamental way during this Daylight climb out of Darkness.

I re-emphasize: I try not to judge either side of the Day/Night equation – this is not always easy obviously – it is hard not to judge oneself when one acts in a state of ignorance (in possession of half-truths only) -- because I do understand that the Soul experiences all of this movement – rising into White Fascist totalitarianism and sinking into Black Marxist totalitarianism – and is all things at once when Time is comprehended as a organic Whole, only separated into half-truths when Time divides into trinitary parts, when the Whole differentiates into component pieces for the sake of re-creation, at Dawn.

Inflation as ‘Body’ Growth of the Day-Cycle; Deflation as Body Dissolution, and Return to One’s Roots During the Night-Cycle

I have suggested that we adopt a new understanding of what inflation actually is. Inflation, in my view, is simply the ‘growth’ stage of any organism, during which time the ‘body life’ expands, whether it be a universe, nation, individual, or economic system. The universe is a bubble; the nation is an ego-bubble, as is the separate individual cell and a society’s economic system.

The American government has been adamantly claiming that there has been no ‘inflation’ in America for decades. These defenders of statistical superpositioning refer to the CPI and PPI gauges, the Consumer Price Index, and the Producer Price Index. Of course they do not talk about the almost constant re-centering to these gauges, along with regular seasonal and other readjustments, such as excluding housing and energy from the statistical package, deleting the most volatile streams of data, to ‘normalize’ the output – ‘normalize’, in this case, meaning, largely, to neutralize the data. No one likes higher interest rates, especially politicians.

Scanning the news recently (I am re-writing and polishing now in March 2011), I came across this internet headline and an article written by Luca Di Leo:

US CORE INFLATION FALLS FIRST SINCE 1982

Consumer prices barely rose in January and core inflation fell for the first time since the 1982 recession, leaving scope for the Federal Reserve to keep supporting the economy with record-low interest rates.

The seasonally adjusted consumer price index rose 0.2 per cent in January from the previous month on the back of higher energy prices, the Labour Department said, the same increase as in December 2009.

But core consumer prices, which strip out volatile energy and food items and are more closely watched by the Fed, fell by a monthly 0.1 per cent in January. The last time core consumer prices fell was in December 1982. Previous data had showed there was month-to-month drop during October 2008. But the report Friday revised that decline to a flat reading.

Was deflation still winning, despite the government spending of trillions in borrowed money to make sure it didn’t win?

This is a different story, one we will look at later.

The article above offers essentially my own view of the inflation question – but not the same conclusion the author adopts in the first paragraph. Actual growth-inflation of the economy, after the last Night-Cycle (1965-1983) began the inflation or growth cycle which ran from 1983-2001 and a bit beyond, since Greenspan/Bernanke spent money like drunken sailors in an attempt to keep the inflation/expansion going.

Does this give the current Federal Reserve ‘scope…to keep supporting the economy with record-low interest rates’? Well, it does it you are not paying attention.

I am also not suggesting that all expansions produce positive inflation and all deflations negative inflation. That is the ideal. We have been led by Fed chairs with remarkable lack of vision – and we have had Fed chairs mostly dumping extra money into the system in an effort to stimulate during periods of rest.

If we follow the scheme I am suggesting of inflating the monetary system during the Growth Cycle and deflating the monetary system during the Contraction (No-Growth) Cycle, we will have symmetrical seasons of inflation followed by seasons of deflation. Orderly. Well-controlled.

Let’s Not Forget: Generally Speaking the Rich Get Rich By Cheating and Stealing.

Generally speaking, the rich get rich by cheating and stealing. We should not forget this.

Money is not the root of all evil; but the love of money is the root of all evil.

Bill Gates is one of the richest men in the world; and he has given more than 50% of his wealth to charities. The Walton family (Walmart owners) are perhaps the richest family in the world; and they have given less than 1% of their wealth to charitable organizations. This is their choice of course; and needs to continue to be their choice.

However, governments can and do reward companies for charitable actions, through tax benefits or other considerations. Clearly, Walmart’s treatment of its workers should not be ignored by government regulators. Wage-slavery is not a corporate right. The process of legislating labor policy to enforce certain standards of decency that the socity at large supports needs to be again recognized the most appropriate means of correcting imbalances in the continuing Corporate/Labor dialogue.

A famous American shoe company that makes a designer sneaker could export all production jobs to Asia, pay relatively unskilled workers about $2.25 a day to manufacture these sneakers, export the shoes back to American, European or Japanese markets for pretty impressive profits. The production cost per shoe might be $3 a pair in Vietnam (labor and material) and might sell for $250.00 in First World markets. That’s a pretty impressive mark-up.

In fact, that is the kind of inflated mark-up Western Nations – First World nations – do not have to live with. Increased corporate taxes is one clear way of legislating unacceptable mark-ups and, at the same time, directing corporate profits to unwinding the US budget deficit, instead of letting corporations direct such profits back to their own corporate officers as million dollar salaries and billion dollar bonuses.

One argument companies might make as the logic of exporting jobs to low-cost markets is this: a company able to make shoes (or any product) much more cheaply through foreign production, could lower domestic costs of the manufactured goods. This does make sense logically. But that’s not how it has worked. Business has been able to win on both ends, with both decreased costs and with increased profits. Why? Because consumers have tended to view credit as money-in-their-pockets instead of a hand-cuff on their wrists. (In fact, it’s much closer to the latter than it is to the former.)

Is There Inflation? Anecdotal Evidence.

When I was a child in 1966, my father bought me a new pair of Chuck Taylor Converse All-Star sports shoes each year so I could play basketball. These athletic shoes were the best that money could buy at the time; I think these shoes cost about $3.50 a pair. If we compare a current cost of Nike Air Jordan shoes today ($250) with my old Chuck Taylor Converse All-Stars -- the best sports shoes on the market in their day -- we see that prices have inflated some 7000%. My father worked for the Sinclair Oil Refinery in Sinclair, Wyoming as an office manager (Payroll, Human Resources, Accounting, et.). I can’t imagine he was paid more than $15,000 in 1966 (and that may be high). The inflation rate implied in this example suggests that my father would need to be making $1,056,428.57 today, against $15,000 in 1966, in order to pay for the state of the art basketball shoes.

I admit that this example is somewhat self-serving. You can argue that quality of product is much higher today, that raw costs have gone up. Labor costs, in this example, have not gone up however. I will give other examples later in this book that will show clearly that we have just passed through a devastating inflationary cycle – one that has largely been ignored by governments and economists -- from which we are only now beginning to unwind, with the deflationary spiral that has just begun in 2007.

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When I was growing up, I idolized Willie Mays. He was the greatest all-around baseball player I ever saw (ahead of Robert Clemente by a fraction). I remember all the excitement about Willie Mays becoming the first major league baseball player ever to break the $200,000 salary barrier. He never did. His highest payday was in 1971, when he earned $180,000. Not bad for a kid from Mobile, Alabama, growing up in a racist nation, playing a little boy’s game for much of his life.

Mays could hit for average, hit for power, run, field, throw – he was one of the best defensive centerfielders of all time. He is in the Hall of Fame and will probably be considered by History to be one of the greatest all-around baseball players of all time, if not the best.

Ok, now for the ‘inflation’ side of the story.

Manny Ramirez is a very good hitter today, a clutch hitter, who does not field well, does not run well. In fact, Manny is a liability defensively. He doesn’t have range to get to balls, he doesn’t have grace when he does get to balls, and his throwing arm is mediocre. He’s slow. Willie Mays stole 338 bases in his career; Manny has stolen 37.

Manny has a higher career batting averge than Willie Mays (.314 versus .302). Willie stayed in the league a few too many years; this dragged his batting average down. Willie hit 660 homeruns in 22 years. Manny has hit 527 in 16 years. It is doubtful that Manny will pass Willie’s homerun total (Manny has averaged only 19 homeruns his last three seasons). Manny would need to play almost 7 more seasons and hit 20 homeruns each year to pass Willie’s 660.

Manny will not ever be considered one of baseball’s greatest all around players and I doubt he will be elected to the Hall of Fame – although he is a great natural hitter and has given his teams pretty consistent offensive firepower, as well as fairly consistent reasons to complain over bouts of laziness and lack of leadership.

Willie Mays made $180,000 in 1971, when he was the best baseball player in history (or one of the best).

Manny Ramirez recently signed a $25 million contract to play for the Los Angeles Dodgers in 2009.

I have nothing against a man getting what he can in this life. But don’t tell me there is no inflation. Manny is making 125 times what Willie Mays made in 1971. Manny Ramirez isn’t worth what Willie Mays was making. (And now Manny has been suspended for 50 games in the 2009 season for testing positive for drug use.)

By example, an engineer making $35,000 in 1971 would need to be making $4,375,000 dollars today to keep up with the inflation rate suggested by Mays/Ramirez gauge and the acceleration of major league baseball players salaries.

No Inflation? No Salary Growth?

As I have suggested, the reason there was ‘no statistical inflationary pressure’ in America for the last two decades is because the statistics are stacked to overweight the wage inflation component. There are several reasons for this, a primary one being American business has been scrambling to export jobs to low-wage countries and destroy American unions in the process. I am not necessarily pro-union. I understand the hostility to unions in the business world; and I also understand that mafia involvement with unions in the 1970’s helped to destroy the integrity and decency of unions. (The mafia involvement with American Business rarely destroys the image of integrity and decency of non-union businesses – go figure.) But I also understand that without a prosperous working class in developed countries there will be no prosperity in the world economy – there will be no one to buy all these ‘wonderful’ products the world economies are currently mass-producing.

China and India are supposed to pick up the consumer demand, as demand falls in America, Europe and Japan. That is the ‘global market’ company line. So far, China and India are leading the world into depression. Do we really think China and India will have the consumer spending power to lift the world back up after it has fallen down? And will China and India have the political stability to make all this occur? I think not. Civil unrest in both countries seems highly likely as prosperity vanishes and governments (and the business elite) are blamed for this.

Why else are world governments spending so much of taxpayer money to try to fight off the nasty beast of Deflation? To keep their jobs, of course.

It is ‘Good Business Practices’ When They Win the Class War;

It is ‘That Old,Ugly Class Warfare’ When They Are Asked to Pay More Taxes To Help Erase American Debt.

There is nothing immoral in profits. Without profits a business cannot survive, cannot employ citizens, cannot pay taxes that help the government provide public services. With significant profit, a company can expand, can hire more people, and can become even more successful and pay more taxes (although, businesses pay billions each year in lawyer’s fees to avoid paying a fair share in taxes), and can produce more goods, keeping the costs of their products more affordable for consumers. That is the theory, at least. Pure capitalism has many good theories, in fact. Pure capitalism is even deflationary, in the good sense of the word, helping to keep products cheaper through competition that drives prices lower.

Good theories are wonderful, in fact.

However, there is a problem with this theory. Too much capacity, too many goods produced, tends to drive down the price of the product. Too much supply is a problem for business. Too much oil drives down the price of oil products. If the number of vacuum cleaners produced cannot be absorbed by the market at a given price, then prices almost always come down to encourage distribution of the product. So there is a built-in self-serving limit to expansion. There are ways around this problem, but production cut-backs (and worker lay-offs) are a socially unpopular response. Escalating profits that cannot be ploughed back in to the business (for fear of over-production) often are used produce conglomerate companies and are ploughed back into salaries and bonuses of CEO’s and company officials. It is obscene to watch banks and financial institutions being given billions of taxpayer money by their pal Hank Paulson from the U.S. Treasury (who is supposed to be serving the American public), while salaries rise and huge bonuses are paid to the very people who engineered their own companies’ bankruptcies.

In fact, this is worse than obscene; it is criminal.

The 1920’s in America had their Robber Barons. The rescued bankers, mortgage brokers, financiers and insurance men in 2008 – the worst and the greediest on Wall Street, and their cronies in government – should be heading to prison instead of heading to the government welfare banquet.

Republicans, especially those wearing evangelistic colors, the Rush Limbaugh and the Sean Hannity variety, have accused Democrats and liberals of raising the ‘class warfare’ flag whenever an increased tax rate on rich Americans is suggested. In fact, the Republicans and their Business Culture have been waging class-warfare on the working poor in America for the last three decades, through the destruction of labor unions and the exporting of high-paying manufacturing and industrial jobs all in the name of ‘good business practices’. It is shameful to hear Republican supporters of this top-down class-warfare policy now raise the specter of bottom-up class-warfare only after they have been waging and winning the class war for a quarter of a century. The Republicans (capitalists) have no problem with class warfare, as long as they are winning the class war.

The rich, in American, should be paying higher taxes. In fact, the rich have a moral obligation to help their fellow Americans now, especially after the rich had such a free hand for decades to profiteer locally and globally and, also, have played such a pivotal role in destroying the American financial structure which is driving many middle-class families into poverty and many poor in to deeper state of financial despair.

The Judeo-Christian God honors generosity, kindness, mercy, charity even more than He honors selfish acquisition, avarice, pride, status, and covetousness of neighbors’ wives and goods.

Something is going on here, Mister Jones – and you better find out what it is, right away. Or you’ll have people marching in the streets and burning down buildings like they have now in Greece, England, Italy, Thailand, Egypt, Libya, Yemen, Bahrain, and Germany.

We don’t really believe you, Mister Blankfein, when you tell us you are ‘doing God’s work’. You had better come up with a different line, and a different approach than arrogance; and you better start hiding your wealth.

Inflate At The Beginning of the Business Cycle (Think 1983);

Deflate at the End of the Business Cycle (Think 2001).

I repeat: I am not necessarily pro-union. I am not anti-business. The Book of Ecclesiastes is a wonderful statement of how the Day-Cycle, Night-Cycle Wheel of Time, works, how each polarity is a season in the whole round. Each ‘virtue’ or necessity rules in and for its own time, and then recedes, like the tide.

Free the Ego – the Practical Man -- during the Day-Cycle (the Day is the vertical axis of the cross, the North-South orientation) to expand the economy, and to re-create the bubble of affluence. The Cowboy rules the Day, with its Individualism, its Business Culture, its ‘Greed’, its enforcement of law and order. Toss in a little bit of Old Boys’ Club corruption into the mix if you’d like. The Indian rules the Night (the horizontal axis of the cross, East-West orientation) with its emphasis upon the internal and local, peace, sharing, and the life of the group, the life of the soul, and the wonders of Nature as a teacher and a provider.

Death and Depression, the coming in of the economic and spiritual Darkness, the fall of Man from his throne of power and wealth, involves the cutting off of extremes: the high are lowered and the low are raised up, all being pulled into the ark, in a metaphorical sense, all being transformed into the Middle Principle in an attempt to ride out God’s destruction of the world. And that is the real sense in which the ‘meek’ (or the ‘modest’ – those who are ‘whole’) inherit the Earth.

We need the cycle of deflation (the Dark season) as much as we need (or needed, in 1983) the cycle of inflation (the Light season). The crime that the American Ruling Class committed (with their helmsman – I almost wrote henchman --Mister Greenspan) was to curse the Night and to try to make believe it would not come if they merely pretended it wasn’t part of the Reality quotient. Hubris and fear guaranteed this denial.

It is very understandable why the Ego tries to build intellectual systems that reject or deny death. The whole expansion of the economy is a response to the fear of death and to the conflict set up at Dawn which allows the Light to rise and forces the Darkness to fall. The desire for Life (the fear of Death) is the animating force of all creation.

All spiritual thought stems from a fear of Death and an attempt to understand why Death was added to the equation of Life. Death is darkness, the tragic overtaking the heroic. If the mind can create a mathematic trick which excludes Death from the picture – such as forced liquid-ization of the economy, in the sense of flooding the economy with cheap money, not in the sense of forced selling of property to cover debts, which comes later -- then we could all live for ever. Alan Greenspan, and his colleagues, thought they had done exactly that – had saved the world for the good and the decent (and for thesleves and their loved ones especially). Inflate the universe for ever: inflate, re-inflate, re-inflate, re-inflate….

But, apparently, one form of liquidation inevitably leads to the other form of liquidation.

Inflation (Ego Inflation and Economic Inflation) and Karmic Debt

Also, there is a karmic debt that attaches to each Ego Inflation, as there is an economic debt that attaches to each economic inflation. “Sin” begins after the glass has been filled; when the Hero stays too long, and begins overfilling the full glass. And the longer the extra-inflation goes on, the more debt is taken on, the longer and more extreme will be the period of deflation during which that karmic and economic debt are unwound.

In words that might appeal to the Republicans (I have written that I am both a Republican and a Democrat), God is a banker and he gives us credit, packets of Light, if you will. But, in the contract we sign when we take on this loan from God we also are told that we will have to pay God back. Deflation is the nature of Humanity giving back energy to God.

The Darkness in Human Society – poverty, despair, hopelessness, tragedy – is the process by which Humanity is drawn back to God. ‘Falls off its high horse’ might be another way of expressing this metaphor.

The ‘winners’ we love so much in American society, the heroes, the conquerors, the successful and rich, the famous, the stars, the beautiful people, are those who are farthest from God. We look at the ‘winners’ in our society, and what do we see? We see – along with mansions, expensive cars, glamorous vacations and sophisticated friends and entertainment -- divorce, addiction, crime, perversion, excess, loneliness, often early death, sometimes suicide. The ‘winners’ in human society, the rich, the powerful, the famous, are often ‘the losers’ before God calls them home again. The ‘winners’ are Icarus before he falls. The ‘losers’ are Icarus before he flies.

Psychological or Spiritual Deflation is the means by which God throws a human being to his knees.

Economic Deflation is the means by which God throws a society to its collective knees.

Deflation is not the end of life. Inflation, in fact, is the end of life,.

Most world cosmologies begin with God ‘breathing life’ into the world. But God also breathes life out of the world.

To ‘expire’ means to breathe out, to dig a hole in space and create a bubble that, ultimately, cuts one off from his source, the common fabric of life. This describes the inflation process. ‘Expire’ also means to die, of course. ‘Inspire’ means to draw breath in, to call souls back home from the burst bubble of isolated experience. ‘Inspire’ also means to fill oneself with excitement, knowledge, and revelation.

Deflation is closer in time to the beginning of life, the seed, the root, whereat and wherein the human soul becomes a child again, meek with lost pride, with fear and hope and vulnerability all mixed together. Deflation brings back community, and brings a human soul back to its roots, racial, national, and cosmc, back to the origin of its existence.

The Ego does not need God. The Ego believes he is God, standing alone above life, above God, above the mass, the king of the hill, a star centered in its own firmament. Ahab, in Melville’s masterpiece, Moby-Dick is the ultimate Ego confronting the world as a demi-god.

Misters Greenspan, Paulson and Bernanke and all their friends in Washington and on Wall Street were kings of the world (the ‘Lord’s servants’ at Goldman Sachs apparently called themselves ‘The Masters of the Universe’ – Greenspan’s nickname was ‘the Maestro’ -- graced by God, each a Sun in his own system. Who, given such a high state, such grand power, a god ruling over men, would accede quietly to the regular, cyclic loss of power that the Night was demanding? Who would willingly climb down from a omnipotent throne and fall to his knees and proclaim: ‘God, you are higher than I! Your will is my will!’

Saddam Hussein didn’t voluntarily step down; Hosni Mubarak didn’t; Colonel Khadaffi did not either. In fact, tyrants almost never step down; they are almost always have to be thrown down.

Deflation Is the Devil Who Wants to Destroy the Rich

To the minds of America’s Ruling Class, Deflation was not God. In fact, deflation was and is the Devil – as to Ahab, Moby Dick was the Devil. Death was a Devil that needed to be fought, needed to be resisted, needed to be defeated! Perhaps technology could defeat the Devil! Perhaps semiconductors (or technology generated by superconductors; or knowledge of the human genome) might do it! (Even better: perhaps Viagra could do it.) Perhaps Death was just an accounting trick, something humanity could simply take off the books – like the ‘mark to market’ accounting rule -- while everyone was looking in the other direction (in the direction of their own self-interest), perhaps no one would even notice that Greenspan had erased Death from the Cosmic ledger – a kind of reverse ‘mark to market’ by which we confused the origin and the destination somehow, reversing Time’s flow.

People (almost everyone) would get richer and richer if we just continued to inflate and inflate – of course some poor people would be left out, but that was always the case in any Grand Adventure -- and we would all sail off into the sunset in our collective Ted Hood Yacht. Perhaps, together, the Great Society of Individuals, could kill the Great White Whale of our finiteness. Perhaps we were the generation God had designated to finally destroy that form of spiritual Gravity which transformed Hope to Despair, which transformed Victory to Defeat, which annihilated Beauty and Bodily Power and terminated Youthful Dreams, and was the tragic denouement of every play and every existence ever writ!

And perhaps not.

We need deflation; and we need inflation. Deflation saves human souls from their isolation, from their self-love, from their manic disease of pride and inhuman will. Inflation saves human souls from their self-loathing, from their lost direction, and from their lonely descent into failure.

The Night is not only our primal enemy; the Night is, at the same time, our primal spiritual regenerator. The Night is death, but it is also peace, and the source of our Wisdom. The Night is terror, but it is also our comfort, our rest. The Night makes us small again, but it also gives us dreams, which resuscitate us, and carry us back in to the light, allowing us to become, eventually, large again.

Material wealth is not the only treasure in life. Material wealth allows us to become gigantic individuals but it also forces us to become demonically isolated and dangerous. Material possessions separate us from life – giving us freedom to pursue our solitary dreams but also becoming the burden that cuts us off from our humanity.

Wealth is good and bad; Poverty is good and bad. Nature is wealthy in Summer and Autumn; Nature is poor in Winter and Spring. We must experience the entire round of this cycle in order to gain depth as human beings in human cultures. Something is taken from us in Winter – but something is also given to us. We lose our bodily pleasures and our bodily strengths but we gain a spiritual treasury. We lose power but we gain perspective. We lose passion but we gain compassion. We lose wealth but we gain peace of mind, if we are fortunate. We lose youth but we gain a sense of completion. We gain wisdom. We gain initiation into a larger frame of mind, a larger picture of reality, where we fit, and how we are, in truth, that picture of reality we are seeing.

As we pull up and away from the Earth, from our Ego obsessions, schemes, and desires, we see, from a greater height, how all things work together in a system of complex integration.

And, rest assured, deflation is not the end of all things, is not the last movement of a dying opera. The universe is a seed that expands (as a bubble expands) driven by the hot, fiery Great Breath and builds great creations. But Time kills the universe too. The atomic alarm-clock goes off. The universe contracts, crumpling (imploding) matter as it recedes, pulling down great structures, as matter drawn back down toward the black hole center of anti-matter, contracting back in to a seed again. It is a never-ending process: a flower that blooms; a flower that grows corrupt, decays, dies, only to bloom again, after a period of rest and germination.

The universe is a great tree that rises up and falls back down again, rises up and falls back down again, an endless cycle of Day and Night, each time carrying a new dream into construction, the dream it is given in the Night. The seed is the dreaming time, and the resting time. So it is with humanity. So it is with the human atom, Man.

Do we really need an economic deflation? Yes.

Inflation --More Anecdotal Evidence:

Higher Education Tuition Inflates More Than 1600% in Three Decades.

I worked for thirty years in administration at he University of Oregon. Each year, as part of my tasks, I developed a statistical study for the department. One part of this study centered on the cost of tuition for students.

From 1976 to 2007, University of Oregon full-time tuition for undergraduate residents of Oregon climbed from $216 per term to $2107. This is an increase in thirty years of 875%.

In the same time, full-time tuition for non-resident graduate students increased from $320 per term to $5447 per term, an increase of 1602%.

To put this in perspective, a person earning $20,000 per year in 1976 (a reasonable salary at the time), would need to be making $320,400 in 2007 in order to keep up with this suggested inflationary rate.

A person earning $60,000 in 1976 (a higher administration type salary), would need to be making $961,200 in 2007 in order to be keeping up with this inflationary rate.

Not many job categories have increased at this rate. Some have: CEO’s of elite American businesses, successful founders of technology or biotechnology companies, or internet start-ups, Wall Street investment bankers, perhaps doctors and professional and college football coaches. But most Americans have not seen this kind of inflation of salary rates.

It is not just higher education which has inflated so dramatically.

When I was entering college in 1970, a new Volkswagon bug cost $1700. Today, a new bug costs $20,000. This is an increase of 1100%. A person making $20,000 in 1970 would need to be making more than $215,000 dollars today to keep up with that ‘suggested’ inflation rate.

Then, of course, there are housing prices.

My sister-in-law in Portland, Oregon bought her house in 1988 for $71,000. This was a modest three-bedroom house in a modest part of Portland. She and her husband had just emigrated from Vietnam; both she and her husband were working jobs starting at close to minimum wage. She had $3000 in savings and borrowed another $4000 from her mother to secure a 10% down-payment. In 2007, this house was valued at $700,000. In 2008, Portland housing declined about 10%. A house that has increased in value from $71,000 in 1988 to $630,000 in 2008 has increased 787% in twenty years. A couple making $30,000 in 1988 should be making $236,100 in 2008 in order to keep up with the suggested inflation rate designated by this gain in housing.

Talk about ‘global warming’!

In 1950, the year I was born, the median price of a house was $14,500. Average income was $3,216. In 2006, average house prices in the U.S. were $232,000. This is a gain of 1500% and suggests that average income in 2006 should be around $300,000 per year, using 1950 as a benchmark of normality.

American Bank Profits Are Extracted Directly From the Pockets of American Consumers. Why Do We Allow This?

The global economy has been in a condition of ‘massive, unsustainable animal heat’ for more than a decade, with Alan Greenspan leading the charge, cheering on the dogs: ‘Get your dreams now! Take on more debt! Being deeply in debt is a great thing for yourself, for your family, and for your country – even for the health and well-being of the Earth!’ (Alan, in this role, appears more like a circus barker than the world’s Number One banker.)

Debt is good. Debt is sustainable. That is the message.

But are high levels of debt really sustainable? A picture is worth a thousand words. In 1950, Americans’ debt to income was 20%. It is currently almost 120%. Personal savings as a percentage of income was 7% in 1950; today it is less than 1% (in the chart below it is 1% -- it has grown to about 3% in early 2009), the lowest it has been since the 1930’s, when it went negative. (This suggests an interesting relationship of low personal savings and economic depressions.) Of course, who wants to save money when interest rates are hovering close to zero and speculative bubbles in stocks, housing, and commodities are making money, apparently, for almost everyone playing the game?

A second chart shows current American total debt is 350% of GDP, the highest in history. In 1930 American debt was 300% of GDP; and we all know what happened to the economy at that point in history. American debt amassed in the late 1920’s and 1930’s did not get unwound until almost 1960. In the late 1990’s American debt vs GDP attempted to peak at about 240%. Alan Greenspan to the rescue. To drive off the great leviathan of recession, Mister Greenspan opened up the waters of liquidity: Americans responded by taking on more debt, pushing total debt to 350% of GDP in 2008. More debt does not solve the problem of a society carrying too much debt. Stimulus packages and lower interest rates will not achieve a renewed American economic might – just more debt for the taxpayer and more debt for the consumer.

We are in a very deep hole. And it will take America almost a generation to get out of the hole we have all dug, with the help of Misters Greenspan and Bernanke and their ‘free market’ ideology – that is, keep the markets free of government intrusions and business will police itself and everyone will be happy.

Another look at historical household debt as a percentage of disposable income, shows American consumer debt per household has doubled since 1975. What was Alan Greenspan smoking or drinking (or reading) that made him believe that this manic assumption of debt was not a threat to the well-being of the American middle class?

Who benefits from a high debt environment? Well just about everyone but the American consumer. Bankers benefit. The entire financial professions benefits. As Americans became poorer and poorer (more indebted – because debt is a form of poverty when it becomes a burden to repay; debt is a form of wealth only when the debt is invested and returns more than the cost of repayment), banks and insurance companies became richer and richer. As American became twice as indebted from 1975 to 2006, financial companies became twice as rich.

Another chart demonstrating historical financial company profits seems to be the smoking gun in my (and many other analysts’) conclusion that the banks caused the Great Depression in 1929-1947 and the banks have also caused the Great Depression of 2007 (2001-2019 actually). ‘Caused’ is an odd word, I admit, in a scenario of necessity. I do admit this.

The greater the profits of the banks, apparently the greater the poverty of the rest of America. I wish I had a chart showing the same data for the 1800’s in America. It would be interesting to see the position of the financial industry vis-à-vis American industry and services generally during other Night-Cycles.

How have financial industry workers compared to other workers in America since Ronald Reagan’s revolution to free business from government regulation began in 1982? Not well.

How does this look if we put it in an historical context?

The two great depressions of this era (1929-1947) and (2001-2019) both happened when banks had almost unlimited power to generate wealth – afterall, bankers profits are not generated out of thin air. They are taken out of someone’s pockets. As the American banks got richer, the American consumer got poorer, slipping in to poverty and depression.

Looking at this chart, one might wonder about the 72 year cycles (18 years x 4 = 72 years) represented by 2001, 1929, 1857, and 1785. As we will show in this book, each of these eras was accompanied by pretty spectacular economic depressions. Again, it is my premise that banker greed has caused the great depressions in American history, as it has caused the current Great Depression of 2007. By ‘caused’ I mean, of course, ‘have acted as a primary agent of’. The real cause is the dualism that drives the systems, leading to the imbalance that liberates greed, selfishness, arrogance, elitism, justification of theft, aggression, criminality, and the spirit of sin.

Analysts might argue that it took Americans almost 30 years to dig out of debt from the Great Depression Era because this massive indebtedness caused a depression, which was then followed by a world war, depriving Americans of an optimum wealth-building business environment for fifteen years after the crash in 1930. Well, we are entering the depression at this moment; and the national responses to another great international depression will make another world war also very likely.

The Era of Fast Money-Making is over. We have entered a new reality, one that will not be an optimum business environment for at least a generation.

A look at one last chart shows the extent of housing inflation that occurred under Mister Greenspan’s watch. The broken line is the Case-Schiller projection of a housing bottom in 2016 or 2017. My own prediction is that housing will bottom in about 2019. On the way down it will overshoot support level establish in the last Night-Cycle (1965-1983).

Is it any wonder housing prices have fallen off a cliff? Fewer and fewer people can afford to buy a house at their current bloated levels, especially now that ‘creative accounting’ banking and exotic no-money-down, guaranteed-to-fail, interest-only-payments-for-three-years mortgages (so called ‘liar loans’) are no longer in favor at America’s insolvent banks.

Also, people have already taken on maximum amounts of debt.

Also, with unemployment rising, businesses failing, with further foreclosures coming as variable-rate mortgages demand significantly higher monthly housing payments throughout 2009, 2010, and 2011, and with commercial real-estate heading down the drain, housing prices are set to fall at least another 50%.

My sister-in-law’s house, which she brought for $71,000, and which listed at $700,000 in 2006, should be worth $120,000 when the smoke finally clears, which will mean a gain of about 2.5% per year, which is the historical average.

It is noteworthy to add that Ben Bernanke, academic wizard and current Chair of the Federal Reserve, follower in the Captain’s Tower to our Ahab, Alan Greenspan, delivered two incisive public remarkes at the time that Robert Schiller and others were warning of an unsustainable Housing Bubble:

We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though. – 7/1/2005

Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise. – 2/15/2006

The man credited with this incisive views of economics was asked to steer America and help to steer the global economy through the most treacherous waters it had entered since 1930 – and this man, our new Captain Ahab, could not even see the White Whale’s spout (Schiller’s Chart) with all the resources (all the Ph.D’s and all the research capacity) of the Federal Reserve Bank at his command. Greenspan had warned of a little frothiness, a little irrational exuberance – and then later, in 2004, advised Americans holding AAA mortgages that they should junk their high-quality mortgages and bulk up on bargain-basement sub-prime mortgages. Greenspan said publicly, encouraging such a trade-up to lower-quality mortgages, the ones that eventually sank the global economy: “Many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade."

This was true. When rates are sinking this is true. But interest rates go both directions. Or do they?

Such wit, brilliance and sagacity from the two prime engineers of global monetary policy for the last 30 years.

These men are two of the men who are leading us through this dangerous world. Greenspan also said about mortgage derivatives: "Derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so". Maybe those who ‘shouldn’t be taking risks’ really should not be taking risks.

Or did Mister Greenspan really mean that the banks should not be taking risks and that they were transferring risk to the American government and the American taxpayers? If so, this which makes this a visionary comment, indeed – Greenspan’s first probably -- because that is just what happened. Of course that didn’t happen until after 2008, when the banks’ great experiment in No-Fault Loans cratered and drove Wall Street executives to Washington on their knees for another chance.

Remember our definition of ‘looting’?

Health-Care Inflation: Insurance Companies Received American Workers’ Pay Increases

For Almost Two Decades As Reward For Inflated Health-Insurance Premium Costs.

Health-care costs, energy costs, the cost of food have all spiraled upward…has the cost of anything gone down in the last thirty years, except for computers and memory chips and some electronic equipment?

Salaries have moved sideways. Salaries have definitely gone down for a man or woman who once worked in heavy manufacturing and who is now selling coffee at Starbucks after his or her job was exported to China.

One of the reasons salaries are stuck is because of the collusion that has driven health-care costs through the roof. Doctors, medical providers, pharmaceutical companies, and insurance companies all have been having the times of their lives in America. Everybody has been getting rich, at the expense of the American worker and at the expense of sick and dying Americans. Businesses that provide workers with health-insurance benefits have watched insurance premiums rise nearly 10% per year for more than a decade. Doctors, hospitals, drug companies raise prices; insurance companies raise premiums. The worker asks his employer for a raise and the employer says I’d love to give you a raise – but I already gave you a 9% raise in your health-care premium. That’s why American salaries have been stuck in neutral.

A worker making $35,000 a year in 1998 would receive a comparable salary of $90,314.90 in 2009 if health-care premium increases were excluded from the cost of his salary. The worker is still being paid $30,000 a year in 2009. All the extra money is being paid directly to the insurance company. The insurance companies don’t care if doctors and drug companies raise prices, in fact they want them to raise prices; they just pass the costs on to the worker and the employer.

It would be interesting to know if the rate of paying on claims vs receipt of claims by insurance companies has increased or decreased over the same time period. A majority of bankruptcies (over 60% in 2009) each year in America are related to a medical catastrophe – and in the vast majority of these cases the persons in question do have medical insurance. But the bankruptcy comes out of required medical procedures that the insurance policy refustres to cover, or covers only partially.

Nothing animates the traditional American conservative like the claim that medical treatment is or should be a right that should be guaranteed for each American citizen. This is a perfect pictue of the Rugged Individual’s Day-Cycle mentality, the one fighting for existence, fighting against the world, living as a tiny isolated atom, surrounded by hostile forces, sitting in the Judgment Seat, having no sense of Mercy, and certainly no Soul.

One could ask these types: “Should your long-time neighbor suffering from cancer simply die if she can’t afford the exhorbitant costs of medicatl treatment?’ And he would likely reply: “Yes!” Not much love in this individual.

The Night-Cycle is about Love; the Day-Cycle is about Power.

The Night-Cycle is about Generosity and Sharing, real Christian values. The Day-Cycle is about Hoarding and Willful accumulation for one’s self.

In the tribal nature of the Night-Cycle, the tribes takes care of its own.

In the Jehovistic nature of the Day-Cycle, it’s every man for himself, and God against all.

More Anecdotal Evidence: Pharmaceutical Companies and the Government Collude to Enrich Medical Companies And Empoverish American Consumers.

My wife takes asthma medication, which costs about $150 per spray-bottle in the US. When we visit friends and family in Vietnam, the same medication costs $10 per bottle. There is a conspiracy in America between doctors, medical providers, insurance companies, and politicians to gouge the American consumer, for their own enrichment. This has been going on for decades. This is a natural side-effect of the Reagan/Greenspan/Bush doctrine that the business-class can do no wrong, that the business-class should be allowed to regulate itself, that business profits are sacred and trickle down through the entire society in a positive way; and government should simply stay out of the way.

It sounds like the way Banana Republics are governed in Latin America.

I did not find charts that show asthma medication; but Americans pay much more for Lipitor and Plavix. In fact, Americas pay more for ALL medical operations, all types of operation, visits to doctors’ offices; the American government pays less than all other advanced countries for health care, and American citizens pay much more. I can heard proud, conservative Americans reason: “Of coure Americans pay more for health treatment; our medical treatment is the best in the world.” Still Americans life-expectancy is lower than most other first world nations; in the chart below, Americans are expected to live longer than Mexicans but shorter lives than Australians, French, Germans, residents of Hong Kong, Italians, Japanese, British, Canadians, Swiss, the Dutch, and the Greeks. For paying so much more for health-care ($7300 per capita per year, vs. $4400, the next highest, in Germany, vs. $2500 in Canada), longevity rates seem to indicate we are not really getting much back for all we pay. $7,000 a year from a $30,000 salary is significant.

But does the American Dream require that individuals be allowed to become rich at the expense of middle class and poor Americans? I don’t think it does. Ingenuity, hard work, and intelligent risk-taking should be rewarded. But what we have now, in the health-provider fields, on wall street, and in the banking industry, and in many other branches of American business, is a form of state-capitalism, in which the government and businesses work hand-in-hand to enrich themselves, legally and illegally – and the rest of the crew of our ship of state, the Pequod, apparently can be damned.

The health-care bubble needs to be popped to make medical care affordable for all Americans. In 2009, even with all the defaults and foreclosures connected with the housing crisis, over 60% of all bankruptcies of American citizens were caused by medical catastrophes. Americans weren’t only spending beyond their means – they were being gouged by the health-care providers. Even Americans with health-care insurance often face insurmountable difficulties in receiving insurance payments when catastrophic illness strikes.

With all these visual examples of the inflation in America over the last several decades, how can inflation be low. It’s because the CPI has learned to ignore inflation where it finds it. Remember, price volatility is usually excluded from the core rate of inflation

As costly as insturance benefits have become over the last 20 years, having insurance is still preferable to being naked and sick in the land of the health-care cartel. What we have seen in Wisconsin this year is the Republican holy crusade to strip all state workers of rights, salary and benefits – which, we are told, are destroying America by making American Business ‘less competitive’ – of course, less competitive when compared with countries that pay their workers $1 a day without benefits – is that the real wish of the Republican Conservatives, to make American non-financial sector compensation competitive with Laos, Mexico, Vietnam and the Phillippines? This Republican crusade has been amazingly successful over the last two decades and it is continuing, the crusade of American Busiiness to cut expenses at the government level while demanding taxes be cut and the rich be allowed to extend the gap between the very poor and the very rich. That is the Republican game-plan.

Humans with no social conscience have no problem in seeing ‘the enemy’ impoverished. That’s how they attain glory and victory – by humiliating and impoverishing their adversary.

As unemployment rises, so does the number of American workers who have no health insurance. The fact that President Obama sought to address this problem has been the rallying cry of the far right – ‘Death to the Socialists’ – as they see rising health costs and lower wagers and fewer benefits to workers as the way they want America to go – higher business profits and less government spending. Higher worker salaries and higher costs of benefits steal profit away from American Business. Instead of popping the health-care (and higher education) price bubbles, the far right wants American workers to ‘tighten their belts’ and sacrifice for America. But there is no sacrifice at the top – only free money from Washington, and more demands for government austerity.

This can only go so far before Americans learn from Egyptians and Libyans and demand the ruling class to abdicate the throne and give the American democracy back to the people of America.

Of course, this right-wing conservative terrorist is unconscious, and, therefore, may be deserving of some of the pity that Jesus Christ directed upon them when he said: ‘Forgive them, Father, for they know not what they do.’

When they wake up from this crusade and this directive to destroy the decent heart of the Soul that believes in sharing and mercy, they will shrink from shame and wonder what could have driven them to such an extreme of hate. And they will then realize that it was again the one so subtle who has driven them to destruction once again.

How can we be certain that it is the ‘greed’ of health-providers that have caused this massive bubble, rather than increased cost of treatments and technology, and the shark-invested legal waters ballooning the cost of malpractice insurance? (Again, the insurance companies! And the lawyers!)

David Schuler, a health-care researcher and writer, explains where the costs of health-care are rising so much:

From 1965 to 1981 national expenditures on health care more than doubled from $201 billion to $507 billion in real 2009 dollars. Most of the increase in costs in healthcare can be explained by three factors: increased utilization, particularly immediately after the enactment of Medicare and Medicaid during the period 1965-1972, higher prices, particularly during the period 1972-1981, and inflation. Most of the increases after 1981 can be explained by inflation alone.

In the period 1965-1972 use increases accounted for 45.8% of the increase in healthcare spending and price increases accounted for 45%. In the period 1965-1972 57.5% of the increase in spending for physician services can be accounted for by price increases and 32.2% accounted for by increased utilization.

Hospital expenses and physician services account for the majority of healthcare costs and both of those are other words for people’s incomes. Rent, insurance, equipment, and so on are a pittance by comparison with wages as components of both of those.

Here’s my alternative explanation for what has happened to healthcare costs. In the immediate aftermath of the enactment of Medicare and Medicaid in 1966 there was an increased utilization of healthcare. That is what was supposed to happen: old people and poor people were supposed to get more healthcare. In a fee for services environment, the model that prevailed at the time and still has considerable force, that means that physicians and hospitals made significantly more money. Their incomes increased. When utilization levelled off (as should also have been expected) they continued to increase their incomes by raising prices. They had become accustomed to increasing incomes.

In the late 1970’s and early 1980’s the increasing healthcare expenditures capturing of such a quickly rising proportion of the federal budget finally caught the attention of the Congress and a number of steps were taken to slow the increase. But the harm had mostly been done. A high cost basis had been built into healthcare, healthcare was a major component of total GDP, and inflation alone (of which rising healthcare costs are one of the largest components) was enough for healthcare costs to grow unsustainably.

I am not blaming healthcare providers for acting this way. I believe it was a natural human response and they responded as anyone else would have under the circumstances.

However, it means that simple cost control won’t achieve what we need to accomplish. The primary components of healthcare costs are hospital costs and physician services which comprise the majority of costs, insurance administrative costs which comprise something like 30% of costs, pharmaceutical costs which comprise something like 10% of costs, and other factors which comprise very small proportions of the whole. All of these costs are other words for wages, somebody’s income. Healthcare costs are high because wages in the sector are high.

What kind of civilized, wealthy society, a society that claims it is religious or spiritual, allows a poor person to die because he or she lacks money for medical treatment? What kind of society? An ascetic, Day-Cycle, Old Testament society – an ‘eye-for-an-eye, a tooth-for-a-tooth’ society. Not a Christian society surely. A society that admires only those who are on top, those who are successful, only the stars, only the beautiful and the wealthy, who feed one’s own imagined image as world-conqueror, fearless warrior. If one should somehow fall, they are no longer admired.

The rich are admired because one considers oneself

Much Day-Cycle energy is spent trying to repress the weak elements of the society: women; racial, ethnic, and religious minoirities. There is only room for one on top when you are playing ‘King of the Hill’. One must be prepared to fight everyone in the world, all of whom are trying to take away ‘what rightly belongs to you’.

The Day-Cycle is about ‘filling up’: filling up the glass; filling up the image if not always the reality of gain; defending the ego; storing up successes, personal victories, wealth, power, prestige, resisting failure. Resisting failure is the key. One resists failure by keeping people away who fit one’s definition of failure. Losers are not welcome, and are not to be treated well. If one’s picture of oneself is that he is wealthy, or belongs in the company of wealthy, successful people, or will be wealthy one day, then poor people are just a drag on his time and his energy. Poor people (or people with different skin colors) are just trash that needs to be taken out.

This is the classical fascist world-view, the world-view of the Roman Empire, the world-view of the Nazis in Germany.

Jesus Christ Was Not A Conservative.

Americans claim to be a God-fearing people, a spiritual people – a ‘Christian’ nation, in fact -- but they still seek to deny social charity to all except those who don’t need it. This moral stinginess is a sign of Day-Cycle corruption and imbalance. This selfish, small nature must be understood to be a manifestation of fear, a fear of strangers, a fear of failure, a fear of death, and a fear of isolation.

In the dog-eat-dog world, all but one dog gets eaten. And the dog that survives is not really a dog any longer, he becomes a beast.

The dog-eat-dog world-view supports generously the building of prisons and the energetic equipping of armies with cutting-edge and expensive technologies but does not support food or medical treatment for the poor. This is a chronic and soulless imbalance typical of Day-Cycle societies.

“Let them eat cake.”

“Let them eat dirt,” is another expression that is probably closer to the heart.

We Americans are a tribe, even though we don’t normally think of it this way. We like to think of ourselves as competing atoms, struggling to gain the upper hand in the struggle, and certain, eventually, through talent, brilliance, genius, hard-work – and an even playing field – to triumph. Positive energy leads to positive results, we tell ourselves. Sometimes, of course, positive energy leads to aggression, to theft, to other forms of law-breaking – when the result or outcome is worshipped (‘becoming rich’ is the result that is worshipped in this instance) and is considered primary to the process (the moral life, let’s say, is the process in this example) then all means or nearly all means can be used to justify the ends.

If Success is the God, then how one gets to God is really less important than just getting there.

This line of thinking (the ‘practical’ suit of armor worn over the Soul – ‘everyone is doing it!’) leads to the every-growing corruption of the Day-Cycle mentality.

We can choose, as a nation, to change our values. We are not obligated to support a state-vision through which doctors, drug company executives, and insurance agents are made millionaires while the vast majority of Americans cannot afford the costs of their services, except as ‘benefits’ at work. And how secure is this ‘benefit’? Lose your job: lose your right to health-care treatment. A serious illness then results automatically in bankruptcy – perhaps in both death and bankruptcy for one’s survivors. Is this the way we want to live? Are these the values we want our children to inherit? Is it reasonable for us to glorify only the rich in our society; and to discard those who are not rich, who are not the ‘winners’, as losers and as expendable?

Jesus Christ brought a revelation to the Earth 2,000 years ago. God wants humans to build a heavenly kingdom on the Earth. This means taking care of one another. This means not exploiting others for financial gain. These are a set of values religious Americans need to think about deeply, This is the message of Jesus Christ. Christians need to remember the meaning of the message of Christ and perhaps remember less the messages of the Apostle Paul.

Jesus was not a conservative. Jesus Christ was a Night-Cycle angel dropped onto the Earth to bring a new law to humanity. Jesus Christ was a moral revolutionary who preached that humanity needed to change its behavior, needed to change the way it interacted with its brethren. He preached love, generosity, selflessness, and equality. He did not preach the virtues of materialism, selfishness, and suspicion – nor did he espouse the virtue of the rich and the degeneracy of the poor. Jesus preached generosity to the unfortunate; Jesus also surmised that the common vices of the rich made admission of the affluent (Day-Cycle beneficiaries) to the heavenly kingdom almost impossible.

If the rich wish to proclaim ‘Jesus be damned, we’ll take wealth on the Earth now and nothing in the afterlife’, then fine. But one can’t have it both ways.

We must understand the symbolism of Jesus driving the money-changers out of the temple was a very simple observation that God does not reward piety with earthly pleasures and wealth. This is the false argument used by the Satanic Force, which justifies its own greed for power by maintaining, in a subtle manner, Earthly Power’s alliance with God. Jesus admonishes this fraudulence, and commands the bankers to desist in their apparent alliance with Spirit, to leave the protection of this false justification of their own ‘chosen’ status.

This is the act of the Revocation of the Covenant: God the Father, through God the Son, is announcing the end of the world (as we have known it).

We’ll also remember that Satan met Jesus in the wilderness and offered him power over all the Earth. In the movie version of this book, Hank Paulson plays Satan.

The message: God is not the source of Man’s Earthly power and wealth; the Devil is. The Devil’s Contract and God’s Covenant are not the same document. This is a truth the many Christians have conveniently forgotten during the feeding frenzy that has gripped the Earth for so many years. One cannot serve two masters: both God and money.

The Fed’s Job is to Help Create Inflations At the Beginning of the Business Cycle (19830 and to End inflations (Pop Bubbles) at the End of the Business Cycle Growing Season (2001).

The Higher Education bubble needs to be popped to make education affordable again for all Americans with an aptitude for university study. This will require more education support from federal and state governments. It will also require the popping of the health-care bubble, which has become such a huge burden for universities and for university students, not to mention non-educational American businesses.

When someone pointed out to Alan Greenspan the ‘irrational exuberance’ of the housing bubble in 2005, Alan commented: ‘Even if there are declines in prices, the significant run-up to date has so increased equity in homes that only those who have purchased very recently, purchased just before prices actually literally go down, are going to have problems.’

Wrong, Alan.

The American banking system was also going to have problems, as banks careened toward default, insolvency, bankruptcy. The American Ruling Class on Wall Street was going to have problems: Lehman Brothers would be gone; Morgan-Stanley would be going; Goldman-Sachs would essentially be castrated, until Hank Paulson, the Secretary of the Teasury, played Isis to Lloyd Blankfein’s Osiris and magically re-attached the power to gore back to the tired old bull, using an inanimate object to which we will no longer need to refer. Apparently Lloyd had just been doing too much of God’s work and was now petered out and in need of a quick transfusion. Without intervention on a massive scale from their former boss, Henry Paulson -- Paulson made more than $400 million dollars doing God’s work for Goldman-Sachs, before cashing in his stock options to join George Bush’s government – Goldman Sachs would have been turning to ice.

Paulson essentially robbed American taxpayers of billions to try save his friends on Wall Street. “TARP” money it was called.

Nothing was more bizarre than witnessing the bullying Paulson and his trembling shadow Bernanke appear like magistrates of social reconstitution before Congress, putting an invisible gun to the heads of unsuspecting congressional leaders, demanding trillions of taxpayer dollars to ensure the salvation of Western Civilization, something of which only Paulson was now capable, insisting Congress approve a scheme whereby Paulson could give money to whomever he chose, and demanding a guarantee that no one connected in any way with the blatant act of highway robbery (the ‘bailout’ being reconstituted euphemistically as a ‘rescue’, first, and then as a ‘conservatorship’, which would then, under Bernanke, become reconfigured as ‘quantatative easing’) could ever be held legally accountable after the crime.

Paulson later told a colleague: ‘It didn’t have to be a trillion dollars. It could have been anything! But it had to sound big.’

He wanted to scare legislators and the President into giving him what he wanted. He haunted Congress and George Bush with the picture of banks collapsing, riots, revolutions, tanks in the streets, Washington D.C., and New York on fire. Apparently Hank was having a vision of Greece, London, Egypt and Libya at the time.

Washington swallowed its collective tongue (there were resistors) and gave Paulson $500 billion with few questions asked, few strings attached. Later, after giving away his stash, Paulson refused to divulge to the American public the names of the private institutions to which the cash grants had been made, concerned that stigma might attach to institutions so unsubtly graced (and so needing to be graced).

Just how good did Wall Street have it when Paulson was taking care of them, offering loans for almost nothing to help the banks get well? It was a sweet deal, no doubt. According to Shahien Nasiripour, wriring in the Huffington Post:

For the lucky few on Wall Street, the Federal Reserve sure was sweet.

Nine firms -- five of them foreign -- were able to borrow between $5.2 billion and $6.2 billion in U.S. government securities, which effectively act like cash on Wall Street, for four-week intervals while paying one-time fees that amounted to the minuscule rate of 0.0078 percent.

That is not a typo.

On 33 separate transactions, the lucky nine were able to borrow billions as part of a crisis-era Fed program that lent the securities, known as Treasuries, for 28-day chunks to the now-18 firms known as primary dealers that are empowered to trade with the Federal Reserve Bank of New York. The program, called the Term Securities Lending Facility, ensured that the firms had cash on hand to lend, invest and trade.

The market was freezing up. Effectively free money, courtesy of Uncle Sam, helped it thaw.

The European firms -- Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), and BNP Paribas (France) -- borrowed $5.2-6.2 billion in Treasuries 20 different times. The one-time fees they paid on each transaction ranged from $403,277.78 to $481,110. Deutsche led the way with seven such deals.

On each transaction, the fee paid for the 28-day loan is equal to a rate of just 0.0078 percent.

The first of these sweetheart deals began April 17, 2008. They ended nearly a year later on March 5. On that day, Goldman Sachs borrowed about $5.8 billion and paid just $450,000 for the privilege. Goldman was one of four American firms that also paid that rock-bottom rate. Citigroup, defunct investment bank Lehman Brothers, and Merrill Lynch, which was gobbled up by Bank of America in a government-pushed transaction, benefited from the save-Wall-Street-at-all-costs approach. Goldman and Citi got the 0.0078 percent rate on five separate occasions, tops among U.S. banks.

The transactions highlight the extraordinary steps taken by the Fed -- and encouraged by both the Bush and Obama administrations -- to save Wall Street from its own mistakes. Households and small businesses have not been as lucky.

Now, after the first wave of $500 billion of personal Paulson 0% loans and gifts to banks and financial firms (some at least giving back equity stakes) has not done the trick, we hear that more taxpayer money will be needed if the American banking system would survive its own mismanagement.

That is where Bernanke comes in, with his Quantative Easing, 1.0, 2.0 and perhaps even 3.0.

The Wall Street banks are the black hole. They just keeping eating more and more American wealth. The more they eat, the more they need. Feeding the beast seems to be a never-ending saga.

Insert>

Alan: you were wrong. Your policy was doomed. AIG is gone; Fannie Mae and Freddie Mac are all but gone, all ghosts of their former selves, all shadows slipping in to nothingness of the sea.

Wall Street is gone, Alan. The investment banks you so admired, which helped to fuel the global free-market bubble, and fly proudly the great American flag of world financial leadership, have vanished or gone in to hiding, begging the government for money; once proud titans, now hat-in-hand, begging Congress for their own survival. How the mighty have fallen!

The ‘free-market’ is gone, too, Alan. We are heading, inevitably, into an environment of protectionism, of tariffs, of limited trade, of national responses to an international crisis, to international political realignment, probably to world war. And the ideology of the vainglorious ‘free-market system’, wherein noble and virtuous corporate leaders and financiers would be wise and capable of disciplining themselves, will not be mentioned again by serious policy-makers for at least another half-century or so. American capitalism has shamed itself on a huge public stage. American capitalism has given back all it won after a century of battle with Marxist dogma, given it all back and then some, because greedy bankers and politicians could not discipline themselves and limit their own obsessive need to win.

Positive thinking, and cheerleading the business model, is not the same as the moral leadership of a nation. And it is not in the nature of wanna-be billionaires (i.e., criminals) to discipline themselves when no one is watching.

In early 2009, Alan, one in ten mortgages in America were either in foreclosure or under water (are worth less than what is still owed on the mortgage). “Under water” is a symbol of the stage of our Night-Cycle also, as we move from the Fire Element in to the Water Element, the Flood of Chaos, the water rising in a metaphysical and metaphorical sense.

In 2011, the situation became even worse. (These statistics come from The Business Insider.)

Las Vegas, NV: 69.1% of mortgages under-water

Phoenix, AZ: 56.55 of mortgages under-water

Orlando, FL: 55.9% of mortgages under-water

Fort Lauderdale: 51% of mortgages under-water

Tampa FL: 49.4% of mortgages under-water

Riverside, CA: 48.9% of mortgages under-water

Miami, FL: 48.2% of mortgages under-water

Jacksonville, FL: 47% of mortgages under-water

West Palm Beach, FL: 44.3% of mortgages under-water

Sacramento, CA: 42.8% of mortgages under-water

Warren, MI: 42.5% of mortgages under-water

Atlanta, GA: 34.4% of mortgages under-water

Oakland, CA: 31.2% of mortgages under-water

Washington, DC: 29.4% of mortgages under-water

Cleveland, Ohio: 26.6% of mortgages under-water

These are significant numbers. Many debt advisors are encouraging home-owners to walk away from their house when it goes under water as it becomes a losing proposition in terms of an investment. This hurts the borrowers credit rating but it frees them from an obligation that is losing money – and many home-owners are choosing to do this. As the number of homes ‘under water’ increases, these abandoned homes will have to be added to the number of defaulted homes on the market, meaning more houses for sale, a heavy backload that will continue to drag down home prices in most areas in America.

The Housing Bubble is a global phenomenon, of course. In 2011, the following global markets had overpriced housing still, and were waiting for the bubble to break.

Australia: 56.4% overpriced housing

Hong Kong: 53.7% overpriced housing

France: 48% overpriced housing

Spain: 43.7% overpriced housing

Sweden: 39.5% overpriced housing

Britain: 29.6% overpriced housing

Belgium: 23.7% overpriced housing

Netherlands: 20.8% overpriced housing

New Zealand: 20.6% overpriced housing

Ireland: 19.9% overpriced housing *

Singapore: 18.1% overpriced housing

Denmark: 17.6% overpriced housing

* After significant housing price corrections already

Although statistics were not provided, housing bubbles in China, India, Vietnam, South Africa, Russia, and Canada still existed in 2011, supported by central bank borrowing, following policies of America and Dr. Bernanke.

In 2011, the European nations of Greece, Ireland, Spain, Italy, Portugal, Belgium and others seemed more and more likely to default on money they had borrowed through government bond auctions. EU central bankers were essentially following Bernankes QE strategy to buy increasingly worthless bonds issues by these countries in an attempt to keep the interest rates from turning these countires bonds into junk bonds. As investors decline to purchase bonds of nations in danger of default, such countries are forced to pay higher interest in an attempt to attract buyers. As a certain point, the higher interest makes the bond auctions prohibitive. EU purchasing of these bonds is an attempt to keep troubled nations from being unable to borrow money in the publicly-traded bond markets. If nations cannot borrow, then default is guaranteed. These nations are all struggling with a constellation of difficulties: toxic bank loans; destroyed economies; significant outlays for public pensions and social programs; inability to recover from the 2008 global crash. All are being instructed to cut back public spending significantly in an attempt to avoid default – default, of course, hurts the banks most, and senior bond holders, old money and institutional investyors. Austerity plans to balance budgets mandated by EU central bankers affects government workers, government pension beneficiaries, those least able to afford such belt-tightening. In Greece, England, France, Italy and Germany, such belt-tightening measures have already led to major street demonstrations and violent confrontations between police and demonstrators.

Of course, the Night-Cycle is the time of Chaos, the rising of the Waters of Disorder, overt class warfare between the rich and the poor.

In 2010-11, floods in Pakistan, Australia, America, South Africa, France, and the Phillippines have done major damage and killed many people. Major earthquakes in Australia (damaging Christchurch, and destroying the Christchurch Cathedral) – this feels like another symbol, in fact) and Japan, 8.9 magnitude – the Japanese earthquake being accompanied by a huge Tsunami that swallowed up most of northeast Japan, have displayed again a basic truth: Day-Cycles are about Man dominating Nature; Night-Cycles are about Nature dominating (and getting even with) Man.

It is not just America that has overindulged in the Great Debt Orgy. Other nations in the developed world are almost as guilty as America in this. And if one lumps the Euro Area together as a group, Europeans are even more guilty than Americans in debt-ingestion.

CDS yield spreads:

The Day-Cycle Mind believes in the straight line. That is how it works. Stay on point. Use the laws of cause and effect to get things done, to solve problems. The short path between two points is a straight line. But space is curved. The Day-Cycle mind is the diameter inside the circle, the straight line that cuts the circle in two, divides the world in to Day and Night.

The Night-Cycle Mind understands cycles. The Night-Cycle Mind is the circle.

Day-Cycle Minds reading this book are growing increasingly perplexed and impatient. “Get to the point!” they are crying. “What is all this wandering; what are all these digressions? There are too many words. Simplify. Get ri of everything that is not to the point!”

Are we in a hurry to ‘get to the destination’? Why? So we can do something else?

The journey, itself, is the point, not just the destination.

Day-Cycle minds love Hemmingway, and other writers who focus on story and action, John Grishom, even Stephen King – they love Hollywood action movies also. Night-Cycle minds love Marcel Proust, James Joyce, TS Eliot, Dylan Thomas – they love writing that focuses on ideas;; writing is to educate more than it is to entertain; their favorite director might even be the great German director Werner Herzog, whose classic mystical movies of the 1980s were a revelation – who will be despised by the Day-Cycle minds.

The Day-Cycle Mind is single-minded, focused, and directed toward results. Poetry? What good is it? Can you sell it? (Anything that ‘sells’ is ‘valuable’. The Day-Cycle Mind was called ‘Phillistine” in the Old Testament.) We want results, we want profits, we want problems resolved! So, get out of our way…we want to win! (Or: ‘Fight, fight, fight…!’)

This is why the Night-Cycle and Night-Cycle governance is so frustrating for Day-Cycle types. Everything they do in the daylight works for them, leads them from one triumph to the next. Everything they try to do in the moonlight does not work, and leads them in to greater land greater frustration and disappoiintment. They desperately need and want someone to blame for their failures. The Scapegoat, as an astrological symbol, appears at the very apex of the Night-Cycle, which is the very bottoming of strength, the death-and-rebirth, of the Day-Cycle. Capricorn is the goat.

Business Insider expects many defaults and lists countries most likely to default. Of course the US, UK, and Japan have their own currencies and can print more money to avoid default – or experience default through devaluation of their currencies. BI bases its ‘cumulative probability of default’ on a combination of factors, included credit default swaps ( ), current and projected, economic growth, agency ratings of credit-worthiness. Credit default swaps can be thought of as a type of insurance on the loan purchased by a lender (or by any investor) from an ‘insurance company’ – if the borrower defaults, then the lender can use the default as a credit to swap the default in exchange for repayment from the insurance company.

(We will remember that AIG wrote some $400 billon credit default swaps on bad bank loans and had no where near enough money to cover the costs of default. Of course, the government came to their defense. What was our definition of ‘looting’ again? Selling cds obligations in excess of assets certainly qualifies. Goldman Sachs bought billions of credit default swaps from AIG to cover mortgage defaults, and billions of CDS from Citicorp and Lehman Brothers to cover a potential AIG default – both AIG and Citicorp were bailed-out with tax-payer money; Lehman Brothers, Goldman Sachs greatest and most bitter rival, was thrown to the wolves by Paulson and his friends at Goldman Sachs. Goldman Sachs made billions shorting AIG; and received its billions in CDS value from the bailout of AIG, winning on both sides of the trade – thanks to Hank Paulson. Ben Bernanke went along with Paulson: “We just had to fly by the seat of our pants,” Bernanke explained. “Just make things up as we went along.” ‘Make things up’ also means to lie. Bernanke was afraid of Hank Paulson, and all of Paulson’s powerful friends on Wall Street. Some might even call these two ‘Co-Conspirators in a Trillion Dollar Heist’.)

As expectations of default rise, so do yields on credit default swap – making them more expensive to buy.

Nations most likely to default, as calculated by Business Insider in 2011, are:

Venezuela - 5-Year CDS spread: 1170.92

Greece - 5-Year CDS spread: 956.27

Argentina - 5-Year CDS spread: 646.67

Ireland - 5-Year CDS spread: 569.88

Portugal - 5-Year CDS spread: 460.88

Ukraine - 5-Year CDS spread: 460.75

Dubai - 5-Year CDS spread: 455

Bulgaria - 5-Year CDS spread: 248.28

Egypt - 5-Year CDS spread: 370

Vietnam - 5-Year CDS spread: 365

Lebanon - 5-Year CDS spread: 360

Bahrain - 5-Year CDS spread: 313.65

Hungary - 5-Year CDS spread: 304.19

Croatia - 5-Year CDS spread: 286.32

Romania - 5-Year CDS spread: 285

Bulgaria - 5-Year CDS spread: 248.28

Lithuania - 5-Year CDS spread: 260

Iceland - 5-Year CDS spread: 254.46

Bulgaria - 5-Year CDS spread: 248.28

Spain - 5-Year CDS spread: 245.91

As these nations default, banks lose money again, and go looking for more bailouts from central governments. These secondary bailouts may not come. If they don’t come, banks default.

This is what debt does. When it reaches a certain state of density (perhaps a certain % of GDP), it morphs into something impenetrable and toxic.

America can always continue with its QE ‘money printing’. It is not literally ‘money printing’ of course – but it does many of the same things that real money printing does, especially when it is finally unwound – which it must be at some point. QE destroys the local currency – that is one of its main goals. QE inflates the price of all commodities that are trade in US Dollars.

QE allows banks to borrow money from the Fed at .1% interst and loan it to Brazil, for instance, at 11% or so. This is the carry-trade. The massive inflow of capital to Brazil (and other countries with higher interest rates) pushes up inflation in these countries – and they usually respond by raising interest rates, which makes the carry-trade even more profitable. When these nations push up their interest rates, they also strengthen their currency, which makes American products even more competitive as imports. China, India, Thailand, Brazil – Vietnam soon – have raised interest rates recently because of the ‘imported inflation’ that American banks, through Bernanke’s policy, are currently practicing. There is a negative side for Americans also, as one might expect. The rising inflation around the world makes goods and services more expensive at home – food products – commodities – oil. So, not only do American consumers get to pay more at the marketeplace, they also get to pay back the loans the Fed is borrowing to make this carry-trade work for the banks. QE is not free. The money it borrows will have to be paid back int the future. Also, American consumer cannot pursue the ‘riskless’ investment of saving their money, as the forced interest rate contraction policy forces investors out of safe savings accounts in to the more volatile stock, commodity, currency, or (this was Bernanke’s original plan) housing. If Americans do pile in to the Bernanke Bull Market rally and end up losing money when the market corrects, much of this will be due to the fact of the unnatural low interest rates that Bernanke’s plan required.

We emphasize again the famous quote of John Maynard Keynes, noted economist, upon whose work Bernanke and the current government claims to be acting:

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

This, in fact, is what the Bernanke policy of bubble-creation is doing.

America desperately needs to increase its savings rate. Bernanke is making sure this cannot happen by squatting on interest rates like an old woman relieving herself in the woods.

Stocks are rallying in 2011 – and many Americans believe that America is back on the right track, and Dr. Bernanke is the man to thank for this. (Of course, his anti-Dollar policies were also removing profits from the pockets of American investors trading in US Dollar-denominated securities. Most didn’t realize that they were putting stock market profits in one pocket and taking stock market profits out of the other pocket.)

But Bernanke’s policies have caused problems, and are leading to an uncertain, and perhaps tragic, end. In 2011 food riots broke out in many places in the world, including China, India, Algeria, Tunisia, Bangladesh. The Algerian riots kick-started a series of street riots that led to revolutions in Tunisia and Egypt and a civil war in Libya, and increasing uneasiness politically – with major street demonstrations – in nearly every Arab nation in the Middle East, including Saudia Arabia, something unheard of before 2011. The price of oil rocketed higher, as speculators stepped in to manipulate unbalanced markets. Emerging market economies and stock markets in China, Argentina, Indonesia, India, Bangladesh, and Turkey all fell as higher interest rates took some of the punch out of earlier economic ‘recovery’ euphoria – that is, the eupohhoria caused by cheap money ‘extend and pretend’ tactic that was followed by most of the world.

“Saint Alan’s Miraculous Debt-Machine” MJClark 2010

Central bankers seem to know only one button in their arsenal of choices: the ‘INFLATE’ button. Bernanke’s policies did ignite asset prices, which was his plan. He was trying to buy time with more bubbles. Higher stock prices would make Americans ‘feel’ rich again, even though over a trillion of household wealth had been torched in 2008. But Bernanke’s game of bank arbitrage to try to pad American bank balance sheets and borrow, borrow, borrow had a price.

It was the same old game Greenspan had played: blow bubbles through inflation and pretend it was economic growth.

Stocks went up; the price of every commodity went up; the price of oil went up; and the US Dollar went down. There was even talk that the US Dollar would lose its place as the standard fiat currency of the world. First, American Business off-shored it’s high-paying manufacturing jobs; now it is offshoring its inflaltion.

The price of gold and other precious metals soared. Our formula says raise interest rates at the beginning of a Night-Cycle (1965; now 2001), lower interest rates at the beginning of a Day-Cycle (1947; 1983; 2019…). Our formula also says buy gold and other commodities and sell the US Dollar at the beginning of a Night-Cycle (1965; 2001), and sell gold and buy the US Dollar at the beginning of a Day-Cycle (1983; 2019). The chart below shows what gold has done since 2001 – it has gone straight up.

The charts below show the appreciating Night-Cycle gold prices (and depreciating Day-Cycle gold prices) for different time sequences: the first chart shows the Dow-Gold Ratio (Dow Jones Industrial Average divided by the price of gold) for the last Day-Cycle (1983-2001), and then the beginnings of the Night-Cycle (2001-current); the second chart shows only the price of gold (in terms of US Dollars) for part of the Night-Cycle (1965-1983), all of the succeeding Day-Cycle (1983-2001), and part of the current Night-Cycle (2001-2019). As we noted: gold climbs during the Night-Cycle and falls during the Day-Cycle. The third chart shows the Dow/Gold ratio (a chart I have built) over the last century, with very clear demarcations of Day Cycle growth and Night Cycle contraction.

The fourth chart below shows an historical chart of the Gold/Dow Jones relationship during marked Night-Cycles and Day-Cycles. This chart , like the first chart, will show the ratio declining during the Night-Cycles – that is, the Dow in terms of the price of gold declines) – and rallying during the Day-Cycles. The Night-Cycle 1893-1911 seems to be an anomaly. Otherwise the inverse relationship of gold and the US Dollar during 18-year cycles of inflation and deflation seems to hold true historically.

Chart One: Dow/Gold Ratio last Day/Night Cycle Chart Two: Gold Prices Last Night/Day/Night-Cycles

Chart Three: Dow/Gold Ratio 20^th Century and current Night-Cycle (2001-2019)

One will note in the chart above a very clear breakdown of this price indicator in terms of Day/Night-Cycles.

Day-Cycle: 1911-1929

Night-Cycle: 1929-1947

Day-Cycle: 1947-1965

Night-Cycle: 1965-1983

Day-Cycle: 1983-2001

Night-Cycle: 2001-2019

NOTE: The current rally in stocks is not occurring in terms of the Dow/Gold Ratio. It is only occurring in terms of the Dow/Dollar Ratio. Stocks rallying while the Dollar declines is a wash, an illusion – money coming in and money going out at the same time. Only when stocks and the Dollar rally together are Americans becoming richer. The Bernanke Rally is an illusion meant to make Americans feel better about themselves and their government.

Bond Vigilantes Balk at Bernanke’s Inflation Policies

Bernanke’s Quantatative Easing plans have inflated prices world-wide but have not successfully inflated housing prices in America or globally. Housing continues to be a drag on American and global economic growth and on global bank recoveries.

Part of Bernanke’s plan was to keep interest rates low to spark another housing bubble to erase the debt contagion that seized global markets in 2008 and rendered them frozen. QE 1 successfully worked in terms of keeping mortgage rates low – and government housing give-aways (free $8,000 grants to first-time home-buyers) did cause a short-lived rally in American housing. Now the double-dip in prices is here.

The problem is that there is already too much debt in the system, American wealth has been shrunk by about a trillion dollars, and houses in America are still too expensive vis-à-vis ‘real’ mortgages and ‘real’ wages. Banks could continue to issue ‘liar-loans’ and ‘guaranteed-to-fail’ loans – but they would only result in more failure, defaults and foreclosures. The more foreclosures, the more inventory of homes on the market, the more prices would fall.

Also, the bond vigilantes have stepped into (or out of) the bond markets, refusing to participate in the Bernanke plan (the depreciation of the US Dollar plan). Interest rates began to rise, in the face of Bernanke’s announcement of QE2. The Bank of Tokyo chart below shows a rally in US Treasury yields, mortgage rates, and oil and commodity prices that began right after Bernanke’s ambitious QE2 plans to further inflate the world economy.

Remember, inflation is the way that the government (and the banks) steal your money.

Higher interest rates would torpedo Bernanke’s QE strategy, slowing the economic recovery, strengthening (eventually) the US Dollar, and making American debts more expensive, global defaults more likely.

In 2011, the government announced that the CCPI, Core Consumer Price Index, went negative for the first time since 1982. Remember, our Day-Cycle Inflation/Expansion began in 1983. Bernake’s QE inflation plans were failing. Deflation was still a factor, even as rioting and revolutions around the globe were occurring because of Bernanke’s carry-trade policy to repair American bank balance-sheets.

This seemed to suggest that, despite the trillions that the American government (and and through the Fed) was spending to fight off deflation , the War of Deflation was being lost.

The Fed used Quantatative Easing to step into the bond market to make sure US TBonds did not become junk bonds as potential bond-buyers backed away and bought gold and commodities instead. The Fed tried to use its trillions to make it look like everything was still ok in America. American Treaasury Bonds were still desired when investors retreated toward ‘quality’ in the markets. This was an illusion, of course. At some point the Fed was going to have to stop buying TBonds, and unwind its balance sheet – i.e., sell the bonds it had bought. Who would be the buyers then? And, at what price? Remember, when buyers are eager to buy bonds, yields remain low. When no one trusts a sellers bonds, and buyers become scarce, the issuing entity must pay more to find buyers – interest rates or yields go up – and the issuer must pay more to secure loans.

The Clusterstock Chart of the Day below shows: 1) who bought US Treasury Bonds prior to the Continuing Crash that began in 2008: the Fed bought 10%; US buyers bought 40%; and foreign buyers bought 50%; 2) who is buying TBonds now: the Fed is buying 70%; foreign buyers are buying 30%; and other US buyers are buying 0%; 3) who will buy TBonds in the future, when the Fed is forced to unwind its balance sheet, removing 70% of the current buyers?

Bill Gross, America’s ‘bond chief’, who runs Pimco corporation, the world’s largest bond company . In a strangely-titled article to investors penned in November 2010, Gross announced that, because of Bernanke and Quantatative Easting, the 30-year bull market in treasury bonds was over.

Run Turkey, Run

•The Fed’s announcement of a renewed commitment to Quantitative Easing has been well telegraphed and the market’s reaction is likely to be subdued.

•We are in a “liquidity trap,” where interest rates or trillions in asset purchases may not stimulate borrowing or lending because consumer demand is just not there.

•The Fed’s announcement will likely signify the end of a great 30-year bull market in bonds and the necessity for bond managers and, yes, equity managers to adjust to a new environment.

They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets. Whatever the order, America is next in line, and as we go to the polls in a few short days it’s incumbent upon a sleepy and befuddled electorate to at least ask ourselves, “What’s going on here?” Democrat or Republican, Elephant or Donkey, nothing much ever seems to change. Each party has shown it can add hundreds of billions of dollars to the national debt with little to show for it or move our military from one country to the next chasing phantoms instead of focusing on more serious problems back home. This isn’t a choice between chocolate and vanilla folks, it’s all rocky road: a few marshmallows to get you excited before the election, but with a lot of nuts to ruin the aftermath….

When Bill Gross speaks, the bond markets stop and take notice.

In March 2011, Gross announced that he had sold all treasury bonds and would not be buying more. Gross added: “There is no way out of this debt trap.”

According to Gross, if the US transitions to a Bernanke-QE3, spending more borrowed money to defiate the dollar and inflate asset prices, yields on government securities will increase by at least 150 basis points by 2012, resulting in large gains for those shorting the 30-year TBond.

Apparently the only thing that can save America – and save American TBonds from becoming junk bonds – is a meltdown of Europe, through default and social chaos – whereby the US TBond again becomes, for reason of political secturity – the flight-to-quality choice of world investors with no where else to go.

But could America be so stupid as to opt for QE3 – to continue the Ahabic hunt for the White Whale of Perpetual Inflation? We have shown how Bernanke-QE policies have led to higher prices around the world, food riots, political eruptions and revolutions in the Middle-East. We have shown how the stealth devaluation of the Dollar through QEasing drives prices of gold and oil higher.

We understand that higher oil prices will, if they continue to rise, choke off the government-sponsored ‘recovery’ in the global market. Higher oil prices will make manufacturing and transportation cost and consumer expenses rise, causing another downturn in the global economy. But how would more QE cure that? QE would cause oil to rise even higher, would it not? Could anyone really suggest that more inflation of commodities’ prices would be muted by another round of Quantatative Easing?

Apparently so.

Atlanta Fed President Dennis Lockhart has suggested that higher oil prices might justify QE3. We should not assume that Lockhart is not working to prepare the public for another round of Bernanke insanity.

Lockhart, speaking before a conference of busniness leaders said: "If [the rising price of oil] plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation.”

Does Lockhart not understand that QE is causing higher oil prices?

QE, in truth, is not a stimulus for the economy as a whole: it is a stimulus for bankers and for bond and stock markets. What Lockhart is really saying is that the only card the Fed is currently holding is asset inflation in stocks and bonds that cannot be allowed to fail, even if it does cause oil to inflate further.

Lockhart continued: “I think at the $120 range….this is a manageable level. Around $150 (a barrel), it becomes a much more serious concern.” Lockhart is not currently a member of the Fed Open Market Committee.

Not all Fed members share his view.

Dallas Fed President Richard Fisher, who is a voting member, stirred up a bit of controversy earlier in February when he said he would vote to end QE2. Fisher said: “I remain doubtful enough as to its efficacy that if at any time between now and June, it should prove demonstrably counterproductive, I will vote to curtain or perhaps discontinue it (QE1).”

There is disagreement in the Fed camp on Quantatative Easing.

Where does Bernanke stand on QE3. (QE is the only card Bernanke is holding.)

In a speech to the National Press Club in December 2010, Bernanke suggested that QE3 was coming.

"In the end, we'll just ask the same questions. Where's the economy going, and what do various inflation indicators look like? We'll ask those questions. If unemployment is still too low, then we may continue. If we're moving towards full employment, then we won't need to stimulate more."

Bernanke is being disingenuous. He knows that QE3 is a bank bailout, not an economic stimulus. If he was honest he would have said: “Where’s the economy going, and what do vaious inflation indicators look like, and do the banks need more capital to protect themselves against continuing losses from toxic debts.”

The real quandary of Quantative Easing is the unwinding of course. If the banks were actually lending the money the Fed is giving them, we would have massive inflation. Instead, the banks are profiting off the ‘free’ money to improve their balance sheets – they are holding the money instead of lending it. They are making profits playing the carry-trade game. US inflation is muted because of this. The only way to make QE work as a stimulus would be for the banks to start loaning the money, in order to inaugurate another bubble. QE, as it works now, is not an economic stimulus process – it is a contuing bank bailout, nothing more. The stimulus – the non-bank business bailout – which has moved the economy a fraction, has come from the government, not from the Fed.

Bernanke has instructed the US government that it needs to provide more stimulus – and it needs to practice more fiscal restraint. That is the standard conservative line: government needs to lay o ff government workers and cut government pensions and it needs to leave taxes alone.

Today, the US national debt has reached a grand total of $14,137,541,098,8872.71. It is 14 times larger than it was just 30 years ago. It is the largest single debt in the history of the world.

The three charts below show (1) Total Debt vs National Debt; (2) Public Debt (orange line) and Total Public Debt (black line); (3) Public Debt (orange line) and Total Public Debt (black line) as a % of Gross Domestic Product. Some may view this final chart as more positive. However, as GDP shrinks, because of economic depression, and debt increases, especially Public Debt, via QEasing, this chart also will deteriorate.

America has other shocks coming as well.

Commercial Real Estate: the Other Shoe That Is Droppingn

In February 2010, a US Congressional Oversight Panel published an 190 page study of commercial real estate in America. The conclusion:

Executive Summary

Over the next few years, a wave of commercial real estate loan failures could threaten America’s already-weakened financial system. The Congressional Oversight Panel is deeply concerned that commercial loan losses could jeopardize the stability of many banks, particularly the nation’s mid-size and smaller banks, and that as the damage spreads beyond individual banks that it will contribute to prolonged weakness throughout the economy.

Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are at present “underwater” – that is, the borrower owes more than the underlying property is currently worth. Commercial property values have fallen more than 40 percent since the beginning of 2007. Increased vacancy rates, which now range from eight percent for multifamily housing to 18 percent for office buildings, and falling rents, which have declined 40 percent for office space and 33 percent for retail space, have exerted a powerful downward pressure on the value of commercial properties.

The largest commercial real estate loan losses are projected for 2011 and beyond; losses at banks alone could range as high as $200-$300 billion. The stress tests conducted last year for 19 major financial institutions examined their capital reserves only through the end of 2010.

Even more significantly, small and mid-sized banks were never subjected to any exercise comparable to the stress tests, despite the fact that small and mid-sized banks are proportionately even more exposed than their larger counterparts to commercial real estate loan losses.

A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American. Empty office complexes, hotels, and retail stores could lead directly to lost jobs. Foreclosures on apartment complexes could push families out of their residences, even if they had never missed a rent payment. Banks that suffer, or are afraid of suffering, commercial mortgage losses could grow even more reluctant to lend, which could in turn further reduce access to credit for more businesses and families and accelerate a negative economic cycle.

It is difficult to predict either the number of foreclosures to come or who will be most immediately affected. In the worst case scenario, hundreds more community and mid-sized banks could face insolvency. Because these banks play a critical role in financing the small businesses that could help the American economy create new jobs, their widespread failure could disrupt local communities, undermine the economic recovery, and extend an already painful recession.

Things can get worse.

The above chart of delinquency rates shows pretty clearly that all real estate loans are in trouble. Credit card delinquencies and defaults began to decline in 2009. Some analysts saw this as a good sign that Americans were spending less and saving more. No, not really. But the mystery was solved. Banks were writing off about $20 billion each quarter from early 2009 through early 2010, almost exactly equal to the amount of the decline in outstanding credit card debt. So the tick-down was really an illusion, a sort of ‘Get Out of Jail Card Early’ for some borrowers.

The message is: the ‘loan problem’ is still getting worse; it is not getting better. Delinquencies, defaults, and ‘walk-aways’ are increasing.

Commercial real estate loans are getting worse by the moment, in all of the categories of real estate loans.

Rents are falling; the vacancy rates for apartments are rising; and apartment CRE borrowers are heading toward default. This is what deflation is. Deflation is the forced balancing of nature, after the imblance of Day-Cycle hyper-activity. The emptying out is the Night-Cycle balancing act.

National real-estate values are still crashing.

Delinquencies and defaults are occurring across the board: real-estate loans, consumer loans, higher-education student loans; and the picture for housing only gets worse through 2013 as exotic ‘cheater-loans’, ‘liar-loans’ and ‘0-interest adjustable-rate housing loans’ through the end of 2013.

Yes, Alan, it is clearly worse than you (and your successor Ben Bernanke) ever could have imagined.

Alan Greenspan once said: " I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant," So, I guess anything is possible.

Another Shoe: How Many US States, Counties, Cities Will Default?

The Muni-Bond Market Meltdown.

I have outlined above the world’s countries that are most likely to default (using Business Insider’s data and projections). America has a similar problem. States, counties, and municipalities all over the country are now confronting the same situation as are countries of Europe, Eastern Europe and the Middle East: of having not planned for the Night-Cycle to arrive and reverse economic expansion, of having too many debts and not enough revenue and savings to pay down its debt, with tax bases shrinking as citizens lose jobs and become recipients of public assistance. States, counties and cities are essentially on the slow train to bankruptcy; and there is not much they and their governments can now do about it.

What could they have done about it? They could have planned for economic downturns as regular, inevitable, natural occurrences instead of allowing the philosophy of ‘positive thinking’ to lure them into a belief that it might be ‘different this time’. As home-owners are ‘under water’, state government’s are also ‘under water’. It is never different this time.

Meredith Whitney, a stock analyst who had successfully predicted the collapse of the America’s housing market (and the collapse of the big banks on Wall Street), startled and angered some viewers when she appeared on CBS television in December 2010 and announced the likelihood that as many as 100 US state and local governments would default on their debts. She also predicted a massive collapse of the muni-bond markets.

Whitney’s predictions were soon countered by other analysts, who claimed her predictions were wrong, too extremes, or even designed to ‘grab headlines’. One of these analysts wrote the following response:

Meredith Whitney Is Wrong About Muni Bonds

The Dynamic Wealth Report

February 17, 2011

by Jay Chernoff, Editor

Meredith Whitney is wrong.

Who is Meredith Whitney? She’s a former Oppenheimer analyst who famously predicted the Banking Crisis of 2008. Since then, Whitney has become something of a rock star on Wall Street. She left her old gig and started her own company (creatively named Meredith Whitney Advisory Group).

Make no mistake, Meredith Whitney knows banks. I certainly wouldn’t bet against any of her banking industry predictions.

But municipal bonds… now that’s a different story.

Whitney has been all over the news lately with her doom and gloom predictions about municipal bonds. She’s forecasting nothing less than total Armageddon in the muni bond market. According to Whitney, we’re on the verge of collapse in state and local governments.

That’s a bit much, Meredith. I appreciate your vigor. You’ve definitely stirred up a hornet’s nest… and I’m sure you’ve picked up a few clients for your shiny, new, self-named company. But frankly, it’s irresponsible for a respected analyst, such as yourself, to participate in fear-mongering. There’s enough of that going around already.

Unfortunately, I don’t think she’s listening…

The facts simply don’t support Whitney’s catastrophic predictions. Her “conservative” estimates call for 50 to 100 large muni bond defaults within the year. What’s more, she’s forecasting losses of a staggering $200 billion or more. Folks, it’s simply not going to happen. You can stop stockpiling canned food in your basement. Your local government will survive. Chaos will not reign in the streets of America. This isn’t Egypt.

Yes, there will be some defaults. No doubt, some muni bonds will fail. But what Whitney claims… no way.

Check this out… According to municipal bond experts, in the six weeks since Whitney’s proclamation, there’s been ONE default. It was for the grand sum of $6 million.m For Whitney’s claims to come true, there’d have to be over $4 billion in defaults every week for the rest of year. In fact, if the 50 largest cities in the US defaulted on their debt, it would only add up to $83 billion.

Is $200 billion in muni defaults even possible?

Here’s the deal… The widespread fear over municipal bonds (widespread in part because of Whitney’s campaign on national TV) is based on state and local governments seeing lower revenues and higher expenses. In this case, revenues are taxes. And tax receipts are down mostly because property values are depressed. Meanwhile, expenses are rising mostly due to pensions. Many government workers are at retirement age and expect to start collecting their pensions. It’s a tough combination for sure… but hardly one guaranteeing mass defaults.

You see, governments have more options than corporations do. Like corporations, governments have the option of cutting expenses by reducing the workforce, cutting pay, or halting projects (such as repaving roads or building a new park).

But unlike corporations, governments have a virtually guaranteed way to increase revenues. They can raise taxes. If a corporation raises prices, customers can shop elsewhere. If a local government raises taxes, people have to move away to avoid those taxes. And moving is a major undertaking on many levels.

A small to medium increase in sales tax or property tax is generally not going to cause people to make drastic changes to their lives. And I certainly consider relocating to be a drastic change.

Simply put, if a government needs to avoid default, they usually can find a way to do so. It may be unpopular, but it can and will happen, particularly in larger cities. This isn’t to say pensions aren’t a problem. They certainly are. But it’s a problem that will occur over time… and can also be solved over time – especially if the economy continues to improve.

Here’s the bottom line…Municipal bonds aren’t quite as safe as they’ve been historically… but they’re a long way from experiencing a catastrophe. Meredith Whitney’s national crusade against munis is nothing more than a way to gain publicity – and clients – for her new company.

Fortunately, there’s an opportunity to profit from this situation. Municipal bonds have sold off sharply since Whitney canvassed the major networks with her anti-muni campaign. Now, fear-based selling has pushed muni bonds into deeply oversold territory. So, if you’re holding municipal bonds in your portfolio already, don’t sell. Chances are, your investment is safe.

And if you’re not holding any muni bonds, now’s a great time to buy. If you don’t want to pick and choose between individual muni bonds, you can always go the ETF route. Funds like iShares S&P National Muni Bond ETF (MUB) are good, safe ways to invest in diversified baskets of muni bonds.

Meredith Whitney had her day in the sun. But her latest prediction of mass municipal bond failure is over the top. But, we can still make money off of Whitney’s forecast… by taking the opposite side. Ignore the fear tactics. And don’t be afraid to add municipal bonds to your portfolio….

Mister Chernoff may be right. But Mister Chernoff is trying to sell his reader something. He’s trying to sell the reader municipal bonds. He has probably lost money when Ms. Whitney’s prediction led to a steep correction in the Muni-Bond markets. I have read this kind of defense of the status quo too often recently from those proclaiming a defense of the system, accusing critics of ‘fear-mongerers’ and ‘negative thinkers’ – almost enemies of the state. Enemies standing in the way of their prosperity. This frustration of the Day-Cycle players, the one’s losing money from the Night-Cycle contract, will grow greater and greater. They will look for someone to blame for their loss. The Scapegoat Factor will get stronger. Ultimately, they will want a sacrificial victim – the Entitlement Factor -- to take on all their sins and free them from Nature’s wrath.

We will, of course, look at this reality and need more closely as we move through the book.

The ‘negative thinkers’ always get blamed. The women, the men with dark skins, the Dark Force – they are the reason the world is shrinking.

Of course, the world needs to shrink. The world regularly shrinks and then expands; and then it shrinks again.

There was a time in which Meredith Whitney would have been called ‘a witch’ for making such z prediction. It is the same mechanism at work today, only different times we are living in. It is the same mechanism as Joe McCarthy in the 1950’s: make a boogy-man of the shadow for political gain.

Whitney’s predictions did cause a stir in the Muni-Bond markets in fact.

Nouriel Roubini, so-called Doctor Doom, who also gained fame for predicting the Housing Bubble collapse and subsequent economic implosion, disagrees with Ms. Whitney’s prediction – disagrees with the scale of the problem in terms of defaults. He does not, however, dismiss the problem.

Some people think we are on the verge of recovery. These are people without access to Night-Cycle vision – the ‘Magic Glasses’ of metaphorical vision which allow one to see into the Future. There will be no recovery until around 2019 – and to get this recovery in 2019, debt-reduction needs to be accomplished, through higher-interest rates, higher taxes (taxes on wealth) and focused government spending on social programs that help people survive through the difficult decade to come.

There will be a LOT more balancing before the imbalances are sufficiently addressed – and a HUGE imbalance currencly is the gap between the rich and the poor in America.

The Day-Cycle increases this gap; the Night-Cycle’s job, duty, in fact, is to reduce the gap between the rich and poor.

As the chart below indicates, in 2007, the top 1% of Americnas in terms of wealth owned 35% of the nations ‘net worth’ and 43% of the nation’s ‘financial worth’. The top 10% owned 73% of the nation’s ‘net worth’ and 83% of the nation’s ‘financial worth’. The bottom 80% of American, in terms of total wealth, owned 15% of America’s ‘net worth’ and only 7% of America’s ‘financial worth’.

This is appalling.

America needs money to pay off its mounting deficits. Taxes should also be used to narrow this gap between the nation’s richest and poorest – and this should be done during every Night-Cycle.

America is struggling to pay its bills – and instead of taxing the richest citizens, the top 10 richest percent, who account for 83% of the nation’s financial weath and 73% of the nations net worth we are trying to reduce salaries, benefits and rights or eliminate jobs altogether on the 80% of Americans who own only 7% of the nation’s financial worth and 15% of America’s net worth.

This is immoral – and, I will use the word again, this is ‘un-Christian’.

The Devil wants absolute control. The Devil wants a return to feudalism – the goal of the Day-Cycle mind is absolute control and absolute suppression of his personal demon. Ahab, meet Moby Dick.

Roubini worries that trouble will come from the states, counties and cities because of spending cuts that reduce jobs and benefits, and this contraction will create more problems for the federal government. Roubini writes:

"Whether or not we have a new financial crisis worse than the last one, or even a depression, state and local finances will continue to be a major drag on U.S. economic activity. This is not because of defaults; rather, to avoid default and pay for past promises, spending will be constrained, employees will be laid off and taxes will rise. State and local spending is US$1.8 trillion or one-eighth of U.S. GDP; and employs over 19 million individuals, almost 15% of non-farm employment. Some 268,000 government jobs have been lost at the state and local level in the past year, despite federal assistance."

The Democrats talk about raising taxes of the rich (and they are shouted down by angry conservatives); the Republicans (the angry conservatives) scream about cutting spending, especially for social program, pension, worker rights, worker salaries – the so-called ‘free-lunch factor’ for government workers.

In truth, America needs to cut spending AND raise taxes. And it needs to raise taxes on the very rich, and on the very rich corporations; and it needs to cut spending on military expansion, and other sacred cows that angry conservatives are not willing to touch.

This energy for blaming – the Democrats wanting to blame the Big Banks and Big Business, and the Republicans wanting to blame Big Governsment (Big Government was ‘socialism’ in the minds of most Republican adversaries) – unfolding dramatically in Wisconsin last month as Republican governor Scott Walker publicly made state government workers, essentially, the enemies of the state and the cause of Wisconsin’s fiscal decline, Walker’s publicly-stated goal was to pass legislation that stripped the government worker’s union in Wisconsin of its rights to collectively bargain for wages and for benefits. The drama resulted in the capitol being besieged by thousand of protesting state workers and their families opposing the governor inside and (mostly) outside the legislative building,

When it was clear that the Republicans had the votes to pass the legislation, 14 Democratic senators actually traveled to neighboring Illinois to avoid attending the session and constituting a quorum so that the lefislation could be passed. They remained in Illinois for 3 weeks. The governor threatened to send state troopers to forcefully bring the legislators back. In Wisconsin, any legislation approving spending requires a quorum of 24 senators to vote on the bill.

Democrat Senate Minority Leader Mark Miller spoke to the press immediately after the vote, saying: “In 30 minutes, 18 state senators undid 50 years of civil rights in Wisconsin. Their disrespect for the people of Wisconsin and their rights is an outrage that will never be forgotten. Tonight, 18 Senate Republicans conspired to take government away from the people.”

Justin Sargent, a staffer to Senator Chris Larson (D-Wis.) called the maneuver completely unexpected. It showed, he added, that this “obviously wasn’t about any kind of financing, it was an attack on working families.”

Governor Walker was overjoyed. “I applaud the Legislature’s action today to stand up to the status quo and take a step in the right direction to balance the budget and reform government,” Walker said in a written statement.

Soon after the parliamentary maneuver to strip state workers of salaries, benefits and bargaining rights, the Huffington Post, a liberal news organization, published the following story:

Wisconsin State Senate Republicans Took Hundreds Of Thousands In Government Farm Subsidies

WASHINGTON -- At least three of the Wisconsin state Senate Republicans currently demanding that public workers sacrifice benefits, wages and even collective bargaining rights for the sake of the budget have applied for and received hundreds of thousands of dollars in federal farm subsidies, a Huffington Post review of state and federal records shows.

From 1995 through 2009, state Sens. Luther Olsen, Dale Schultz and Sheila Harsdorf all had stakes in farms that received between them more than $300,000 in taxpayer funds.

Those federal appropriations had no direct impact on the state’s current budget woes, but the cash spent on those subsidies, which went to support a range of functions -- from soybean production to small hog operations -- could have been used elsewhere, perhaps even in Wisconsin. More than that, critics say, it muddles the notion, pushed by these lawmakers and Wisconsin Gov. Scott Walker (R), that only they are serious about reining in an overextended, overspent government.

“Members of both parties ... preach fiscal austerity all the time, but then when it comes to farm subsides going to farmers in their districts, they think the spigot should remain wide open,” said Don Carr, a spokesman and policy adviser for the Environmental Working Group, which tracks and critiques federal farm subsidies.

As the Night-Cycle takes hold, the ‘class warfare’ will become more intense. The Wisconsin struggle will be repeated all over the country, at state, county and city level, and also at the federal government level.

Where Did All the Jobs Go

Six million jobs for American workers have vanished. Even more millions of jobs for global workers have vanished. Suicides, mental illness, alcoholism, divorce, crime….these are all real side effects of the destruction of our economy.

Where did all the jobs go?

We know that millions of jobs were outsourced by American businesses from 1983-2001, sent to Mexico, South America, China, India, Vietnam.

Why was this allowed to happen? In order to increase the gap in America between the richest and the poorest? In order to provide Big Business with higher profits, greater stock option wealth, and larger bonuses?

This is one of the places the next war for America will have to be fought.

You say the loss of jobs through outsourcing is not significant? Pictures suggest a different story.

These jobs may never be coming back to America, if Big Business has its way. As we speak, American companies are using stimulus money given by the US government (American taxpayers’ money) to hire foreign workers overseas instead of American workers in America. Government welfare to stressed corporations has been used to continue to shift jobs away from America. Where the Almighty Dollar is the only concern, then Big Business has no loyalty.

As the chart below indicates, this is no ordinary recession. This is a depression. And this depression is not over and will not be over as long as Big Business is telling America what to do and no longer being told what to do by America. Jobs are being added by American Business in this so-called recovery from the 2008 Wall Street Titanic Collapse – but they are not being added in America, they are being added in foreign countries, they are adding foreign workers, who cost American business less money and less benefits than American workers would cost.

One cannot serve two masters. Either one is an American and puts Americans first – or one is no longer an American and should no longer receive the benefits of being an American citizen. Clearly companies that are continuing to hire foreign workers instead of American workers (and using American taxpayers’ money to do so) should be punished for this by being required to pay a higher tax rate.

Pallavi Gogoi writes in his article, December 2010: “Job Market Booming Overseas for Many American Ccompanies”:

Corporate profits are up. Stock prices are up. So why isn't anyone hiring?

Actually, many American companies are – just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat

More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute's senior international economist.

"There's a huge difference between what is good for American companies versus what is good for the American economy," says Scott.

American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated – think semiconductors and software, not toys and clothes.

And now many of the products being made overseas aren't coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 18 percent less than before the recession on furniture, and 10 percent less on electronics, according to MasterCard's SpendingPulse.

"Companies will go where there are fast-growing markets and big profits," says Jeffrey Sachs, globalization expert and economist at Columbia University. "What's changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out."

With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the U.S. Caterpillar stock is up 64 percent this year.

"There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy," says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.

Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 48 percent this year.

DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.

American Campaign Reform Needed to Stem Flow of Jobs Out of America

There was a coup in America that occurred under Bill Clinton’s watch, largely because of the ‘globalism craze’, which, as I have said, was largely a ploy to destroy Big Labor in America – and to save Big Business billions in labor costs by shifting jobs overseas.

Big Labor once funded the Democratic Party as Wall Street (Wall Street and Main Street business interests) funded the Republican Party. When Big Labor disintegrated under the tsumani of Reagan Republicanism, the Democratic Party was left without a monetary base. Political campaigns became more and more expensive. And the Democrats, through Bill Clinton’s leadership, realized there was only one thing for them to do, in order to survive: go to Wall Street on their knees and beg forgiveness. Wall Street gladly welcomed the Prodigal Son back on board. Wall Street would gladly fund both parties. This meant that Wall Street would own America, and direct American political thought and decision-making.

The deruglation of American banks was the smoking gun of this betrayal of democracy. The Democrats had to be practical of course, if they wanted to be more than mere figureheads of resistance to Wall Street’s megalomania. The Democrats wanted to be players too: Big Boys, Adults.

As long as the American Election Circus is allowed to become more and more expensive, and take longer and longer to play out, the power will always be in the hands of the rich. Decent men and women will be required to be either very rich themselves or to sell out to the highest bidder – otherwise they will not be able to compete in the high cost, long-duration marathon that is currently our ‘tradition’. Of course, the election season once was long because trains connected the country, and communication was by telegraph. Ideas could not be communicated instantly, as they can be today.

Today, we are all watching reports of the earthquake and tsunami that has devastated Japan. Japan is ‘under water’ and we are watching live reports of it on televisions, computers and cell phones. We do not need two years to play out our political drama. We can have primaries on the same day in all fifty states. We can have a series of debates leading up to the election, so candidates are well-known to voters.

The long voting season is a major problem only because it means costs grow substantially over time, putting Big Money in the driver’s seat.

We need a government that is not composed of only rich people pursing rich people’s interests.

We need to develop a campaign system that is costless to candidates – so that our governors don’t enter office with hige IOU’s to Big and often Dirty Money hanging over their heads.

Big Money does not care about the welfare of American workers. They care only about profits. Yes, there are exceptions to this. But the exceptions are inconsiderable.

The Bernanke Bailout plan is a bail-out for rich people only. He cares only about the survival of World Banks, the old-money that has been ruling the Earth for centuries, millennia.

The monetary feudalism we currently have in America is what Big Money wants, an aristocracy of wealth. They do not really want a democracy of wealth. And they have used all their considerable talent and political and monetary clout over, especially, the last two decades, to regain the monetary feudalism they desire.

Those who rebel at this notion should look again at the graphic showing the distribution of wealth in America. Ten percent of Americans own 83% of American financial wealth. This is monetary feudalism.

George Zornick writes in his article “Over A Million Jobs Lost In Districts Where Pro-Outsourcing Chamber of Commerce Advertises”:

Over A Million Jobs Lost In Districts Where Pro-Outsourcing Chamber Advertises

Two simple facts remain irrefutable when it comes to the U.S. Chamber of Commerce’s election spending. First, the Chamber accepts foreign money, which by its own admission goes into a general 501(c)(6) account. Second, the Chamber is buying massive amounts of political advertising from that account — just this week, the Chamber spent an unprecedented $10 million on advertising in competitive House and Senate districts.

The Chamber has yet to reveal who, exactly, is funding these attack ads, though they claim we should trust them that foreign money is not being used. While that remains an open question, the Chamber’s political agenda is not: it has long advocated for policies that outsource American jobs to foreign countries. The Chamber’s CEO, Tom Donohue, frequently defends outsourcing: for example, in 2004, he said “there are legitimate values in outsourcing — not only jobs, but work.” Recently, the Chamber came out against a Senate bill that would have discouraged outsourcing.

Today, a new report by the nonpartisan campaign finance watchdog Campaign Money Watch found that more than 1.4 million jobs were outsourced since 1994 in the nine states in which the U.S. Chamber of Commerce is spending significant money. The group also found that more than 184,000 jobs were lost to outsourcing in the 22 congressional districts in which the Chamber has spent $4.8 million on political ads in the same time period.

From the report, here’s what the Chamber spent last week in Senate races, and how many jobs were lost to outsourcing there since 1994:

Senate Race Jobs Lost Target Beneficiary Chamber Advert

Spending

CO-Senate 35.838 Michael Bennet Ken Buck $500,000

CT-Senate 87,500 Richard Blumental Linda McMahon $500,000

FL-Senate 144,600 Charlie Crist Marco Rubio $1,000,000

IL-Senate 272.017 Alexi Giannoulis Mark Kirk $500,000

MO-Senate 102.608 Robin Carnahan Roy Blunt $259.375

NH-Senate 23,107 Paul Hodes Kelly Ayotte $1,005,056

PA-Senate 299,508 Joe Sestak Pat Toomey $498,500

WI-Senate 81,958 Russ Feingold Ron Johnson $248,500

TOTAL 1,433,083 $5,685,056

House Race Jobs Lost Target Beneficiary Chamber Advert

Spending

CA-11 1,765 Jerry McNerney David Harmer $262,268

CO-04 6,327 Betsy Markey Cory Gardner $250,000

FL-08 1,529 Alan Grayson Dan Webster $250,000

FL-24 101 Suzanne Kosmas Sandy Adams $250,000

IA-03 4,253 Leonard Boswell Brad Zaun $183.026

IL-10 9,718 Dan Seals Robert Dold $100,000

IL-11 5.701 Debbie Halvorson Adam Kinzinger $300,000

KS-03 1,321 Stephene Moore Kevin Yoder $172,864

ND-AL 3.850 Earl Pomeroy Rick Berg $273,525

NJ-12 8.451 Rush Holt Scott Sipprelle $150,000

NM-01 5,592 Martin Heinrich Jon Barela $244,598

NM-02 5,852 Hharry Teague Steven Pearce $239,739

NV-03 1,150 Dina Titus Joe Heck $350,000

OH-15 2,932 Mary Jo Kiloy Steve Stivers $261.735

OH-16 12,181 John Boccieri James Renacci $172,175

OH-17 17.245 Tim Ryan James Graham $102,855

OH-18 11,410 Zack Spoace Bob Gibbs $29.245

PA-03 12.376 K. Dahlkemper Mike Kelly $248.500

PA-12 22,511 Mark Critz Tim Burns $248,556

VA-05 24,171 Tom Perriello Robert Hurt $197,002

WI-07 13,814 Julie Lassa Sean Duffy $266,593

TOTALS: 184,229 $4,801.181

More data is available at the Campaign Money Watch website

http://campaignmoneywatch.com/chamber/outsourcing

“The Chamber is raising foreign corporate money and supporting policies that lead to the outsourcing of American jobs overseas,” said David Donnelly, the group’s director. “The 31 Senate and House candidates who are benefiting from political spending by the pro-outsourcing Chamber should address the controversy surrounding their foreign funding.”

Where is the new job-creation in America going to come from? Not from American Business, which seems suddenly allergic to hiring American workers. The right wing conservative screams that Big Government is standing in the way of American Job Creation by Big Business. But there would be no hiring in America if government had not been hiring. Now conservatives (and Business Interests) in America want governments to shrink, which means even a higher unemployment rate.

Conservatives claim that government spending (and, apparently, government job-creation) keeps Big Business in America from hiring (apparently taxes are too high for American Business to hire – although Americans pay MUCH less in taxes than almost ALL other developed countries in the world. Conservatives apparently want Americans to pay no taxes, except to support the American military. Americans pay less taxes than any developed country but Switzerland. If you are rich, of course you don’t want to pay more in taxes. The rich set the rules in America – but this has not always been so. In the 1960’s and 70’s the rich did not make all the rules in America. In fact, during the Night-Cycle, average Americans take strides in wrenching political power away from the rich. That’s what Night-Cycles are about.

We read how high American corporate tax is – but cheating on taxes is first nature to American corporations. Still, the effective tax rate for American corporations is less than most other developed countries, no matter how much Wall Street and Main Street Business Interests complain.

We are told that jobs are being added – and the unemployment rate is declining. This is a lie, of course. The unemployment rate goes down if long-term unemployed go off unemployment and are no longer part of unemployed ledgers and if current layoffs are less than those going off the unemployed rolls.

We are told that the unemployment rate is slightly above 9%. If one counts unemployed, underemployed, and those who ‘discouraged’ workers who have stopped making their weekly journey to fill out forms with the government Unemployment Office nearly one-out-of-five American workers cannot find work. Also, the jobs that are being created are mostly minimum wage jobs without benefits – the so-called Small Business Factor. This helps the government statistics, but doesn’t help American workers much. A little money is better than no money, this is true. No benefits is not better than no benefits however.

Strangely, when the official unemployment rate for American workers was breaking the 10% barrier in 2009, Goldman Sachs was setting aside $11.36 billion for compensation and benefits for its 29,400 employees. That was even more compensation than in 2007, the year before the destruction of the global economy. In 2008, Goldman Sachs earned $2.3 billion and paid out $4.82 billion in bonuses, giving 953 employees at least $1 million each and 78 executives $5 million or more – Blankfein and his top five officers, all declined bonuses that year).

The U.S. unemployment rate has risen too, nearing 10%. In stark contrast, Goldman Sachs has set aside some $11.36 billion so far in 2009 in total compensation and benefits for its 29,400 employees. That's about on pace with the record payout the firm made in 2007, at the height of the bubble. Thanks to Andrew Cuomo, the New York State attorney general, we know that in 2008, while Goldman earned $2.3 billion for the year, it paid out $4.82 billion in bonuses, giving 953 employees at least $1 million each and 78 executives $5 million or more (although Goldman's top five officers, including Blankfein, declined a bonus). This gesture of good-will by Lloyd Blankfein, foregoing a 2009 bonus, was apparently simply deferred to 2010.

In 2007, Blankfein was paid a record bonus of $67.9 million; in 2010 he waas on target to receive a bonus of $100 million – Goldman kept the final number secret. So, his turning down a bonus one year seems to be have been merely a ‘rain check’ on a larger bonus later.

Lest it appear I’m picking on Goldman and Blankfein only, in 2009 Morgan Stanley set aside 72% of its second quarter revenue for employee compensation and benefits. 72% is high even for an industry that spoils its workers with huge payouts.

July 22 (Bloomberg) -- Morgan Stanley set aside 72 percent of its second-quarter revenue for compensation and benefits, more than Goldman Sachs Group Inc. or JPMorgan Chase & Co., amid a “war for talent” with rivals that generate more money.

Christine Harper writes for Bloomberg:

“It was a very good quarter to be a Morgan Stanley employee,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. “I’m not so sure it was so good to be a Morgan Stanley shareholder.”

The average ratio of compensation to revenue at securities firms this decade has been about 48 percent, Hintz said, calling Morgan Stanley’s figure “pretty extraordinary.” Chief Executive Officer John Mack, 64, is under pressure to increase pay after Goldman Sachs set aside a record $11.4 billion for salaries, benefits and bonuses in the first half and JPMorgan boosted investment-bank compensation by 37 percent.

First-Half Revenue, Compensation and Head Count:

Revenue Comp Employees Comp/Employee

Morgan Stanley $8.36 bln $5.91 bln 62,215* $95,009

Goldman Sachs $23.2 bln $11.4 bln 29,400 $386,429

The New ‘Service’ Economy:

Bubble-Debt-Dependent Service Jobs and McDonalds.

As American Business was shipping well-paying manufacturing jobs overseas under the Republican Reagan-induced Day-Cycle (1983-2001), the new glorious ‘service-economy’ was growing in America and replacing the lost manufacturing jobs. What was this new ‘service economy’ anyway? Sadly, the new service enconomy was mostly small business jobs for local small businesses (no or minimal benefits) and well-paying jobs mostly connected to the Bubble-and-Debt Economy: this heart of this new service economy was dependent upon the Stock Market Bubble (Finance sector), the Housing Bubble (Finance sector, banking and Construction), and the Health-Care Bubble, which still has not popped and must pop if America is really going to start over when the next Day-Cycle begins.

Jobs (and well-paying jobs) grew in construction, real-estate, financial services, and health-care.

But the debt-bubble that was creating this New Economy was not sustainable, as the debt of the American worker was accruing faster than the salary-level was growing. And the debt-bubble needed to sustain this new economy was making the entire global economy top-heavy and subject to catastrophe.

The only way for Wall Street to grow jobs again, using this New Economy Model, is to manufacture more bubbles through more debt and more destruction of the US Dollar. And Ben Bernanke is apparently convinced that it is his ‘religious’ duty to do this.

Real Estate Appreciation For Ever was needed to sustain this New Service Economy. More malls, more golf courses, more Super-Mac Mansions, more Elitist High-Rise Condomimums along waterways. That is the good life apparently. More community-creations by philistines with bad taste (I guess that is redundant) seeking to sell the American Dream of the suburban lifestyle to every human being on the planet – God forbid.

Nature had different ideas.

In fact, throughout the 1980’s and 90’s it was not the Old-Guard American companies that were generating new-job growth. As I have suggested, it was government; and it was the new start-ups, the new generation of companies, internet-related start-ups mostly, and others. The Old Guard Companies were actually a drain on the economy. They were, as they are now, attempting to preserve a status quo in a new environment with which they could not keep up, not only because of worker costs but also because of lack of imagination. The Day-Cycle overlords are disciplined, efficient, pragmatic, hard-working, shrewd with money, skilled at political gamesmanship, and and power-accrual. They are not especially imaginative however. They are good at following formulas. They are good at generating straight-line targets and being single-minded (one-dimensional?) at reaching their goals. But they are not imaginative – because imagination is the chief characteristic of the Night-Cycle atoms (sub-atoms) who represent the values that the Day-Cycles abhor and fear, and seek to oppress, keep down in the dark dungeons, try to keep as far from the daylight as they can.

They are positive-minded. But, as I have said, Day-Cycle positive energy drives the positive thinkers, positive thinkers do not drive the Day-Cycle positive energy. Day-Cycle minds are along for the ride and then truly believe that they are the gods creating the expanding world – and they continue to believe this, even after the expansion has ended. This is a mistake that Geeenspan made, misunderstanding that the water was moving the boat instead of Greenspan himself.

Preserving the Old Guard Companies (TBTF banks and underperforming automobile companies – and AIG) during the Financial Collapse was a mistake: more debt thrown into a black hole whose profession had become eating money. New American job growth in the future will not come from the Old Money Companies who control America politically and who seek to keep America from moving into the future with the new technology and the new vision of business generated by the younger generation, which would clearly leave the rigid and stratified Old Guard behind if they had the freedom to move that the Old Guard sought to oppress. The Old Guard Corporations are like the Type-A successful Father who will not allow his children to be more successful than he is.

We need to prune our economic garden. That means letting the old debt-ladened companies die. Too-Big-To-Fail means Guaranteed-To-Suffocate-New-Growth. American genius will lift America up again, not by clinging to an Old World construction and privilege that is now gone, but by embracing the New World that is coming, after the current Night-Cycle does its creative-destruction.

The debt-destruction of the Night-Cycle is a good thing. If we fear it, we become forces of Evil, forces of Fear. Like Herod, we translate this fear into a directive to destroy the New World that is about to be born.

We should be supporting the new generation of vehicle-producer (the Old Guard cannot create the New World because it has no imagination – the Dream is born out of the Night-Cycle) instead of attempting to keep Ford and GM alive. If they can’t adapt to the New World they are confronting, then they will have to die, like an old generation that is trying to keep change from occurring (political power of the Old Money and the Wall Street Overlord companies are actually retarding America’s growth).

The Old Money Corporate Aristocracy is not going to save America’s economy. They have already chosen to save themselves, to turn their back on American workers, in order to have higher margins, higher stock prices, more valuable stock options, and higher bonuses for stock performance. They have put themselves first: they have joined the side of the Devil. (It is a fixed game, of course. When their performance falters, they whine and cry and beg the American government they own to give them free money or else – and the bonuses and the higher stock prices just keep coming and keep coming, as the rest of America sinks into a dark feudalistic zone of despair.)

This despair will not last for ever. And those who stand in the way of real progress will be mown down like old grass on harvest day.

The chart below shows where American investment should be focused: to allow the noncreative Old Guard companies who use cheating, stealing and unprincipled political influence to imitate growth when they can no longer compete without cheating to be overthrown. The established companies that have already expanded and are now becoming rigid, static have become Too-Big-To-Succeed without special favors from Washington. In Nature, the new grasses push out the old. The Too-Big-To-Fail Banks and the old rigid ‘fixers’ on Wall Street should be allowed to fail when they fail. Aemrican will always recover from a failed company; but it will not recover from an obsessive fear of change that rewards corrupt conglomerates to blackmail and extort by political influence what it cannot create on its own.

Real Despair Caused by Mesers Greenspan and Bernanke’s Debt-Bubble Policies.

Ervin and Ana Lupoe both worked as medical technicians at a Kaiser-Permanente hospital in West Los Angeles. They owed $850,000 on a mortgage; they both lost their jobs. They were in foreclosure; and they bounced a check for back-taxes with the IRS. So Ervin shot his five children, his wife and then himself. They were trapped; and becoming homeless with five children was not a future they were willing to confront. This was the seventh murder-suicide of a family in California since the depression, generated by the broken housing bubble, hit California.

This type of despair is happening all over America, all over the world, in fact.

More than just a few late-comers to the global housing Gold Rush, the bank and government-sponsored low-interest rate party, are going down in flames, Mister Greenspan. Some of your friends are probably going down too. Your own wonderful reputation is also going down in flames. In the future we will reading about Herbert Hoover and Alan Greenspan in the same breath. And you, too, Mister Greenspan, Captain Ahab, will be going down in flames.

1,500 farmers commit mass suicide in India

Wednesday, 15 April 2009

Over 1,500 farmers in an Indian state committed suicide after being driven to debt by crop failure, it was reported today. The agricultural state of Chattisgarh was hit by falling water levels.

"The water level has gone down below 250 feet here. It used to be at 40 feet a few years ago," Shatrughan Sahu, a villager in one of the districts, told Down To Earth magazine

"Most of the farmers here are indebted and only God can save the ones who do not have a bore well."

Mr Sahu lives in a district that recorded 206 farmer suicides last year. Police records for the district add that many deaths occur due to debt and economic distress. In another village nearby, Beturam Sahu, who owned two acres of land was among those who committed suicide. His crop is yet to be harvested, but his son Lakhnu left to take up a job as a manual labourer. His family must repay a debt of £400 and the crop this year is poor.

"The crop is so bad this year that we will not even be able to save any seeds," said Lakhnu's friend Santosh. "There were no rains at all."

"That's why Lakhnu left even before harvesting the crop. There is nothing left to harvest in his land this time. He is worried how he will repay these loans."

What Can the Obama Government Do About The Second Great Depression? Not Much

What can the Obama government do to solve the problems of economic collapse during this necessary period of deflation? Not much really. (Neither could a real Republican president – Obama has become a kind of fake Republican president, like Bill Clinton was -- do much of anything to change the direction of history during a Night-Cycle.) Although auditing the Fed to see if we really need or want to have a Fed would be a good place to start reforms. We also need to see if the Fed has been breaking the law all these years in their allocation of public money to private interests – we might have to make arrests and proceed with public prosecutions and and trials.

In a very real way, depression is ‘matter’ being drawn into a black hole, matter being destroyed through a growing proximity to anti-matter. Government can provide support systems for its citizens, extend unemployment benefits, generate government jobs to help reconstruct the infrastructure, protect savings in the self-destructing banking system – and let the old dying companies go down.

The government should raise taxes, pay off its debts, take on no new debt, raise interest rates to encourage Americans to save. We do not need more borrowing now. We have had too much borrowing and we need to act responsibly and stop spending as though spending, itself, might save us. Spending will not save us.

We need to begin to demolish debt with the same single-minded (absent-minded?) glee we took on debt: through repayment where possible, through default and bankruptcy where necessary. We do not need to protect banks who made loans without careful consideration of risk. Banks must pay for their mistakes in life like all of the rest must also. No one bails the rest of us out when we make a bad decision that hurts us. We need to all live by the same rules. We need a world when the rich don’t get special treatment because they can pay bribes and corrupt those handing out ‘Get Out of Jail Free’ cards. If a bank goes down, another bank will rise up in its place.

There is no easy way out of this dark forest we have entered. We did this to ourselves, through decades of self-indulgence and deification of the prerogative of lack of discipline. We have to take the pain of our rehabilitation. The Depression is given to us so that we can sober up from a materialistic orgy that may have been fun while it lasted but which can never go on for ever.

We have been living in the Devil’s camp, believing that the Devil was God. We are heading in to a darker environment. One watches the throes of birth occurring in the Arab world in the Middle East. The Arab World is waking up. It is their Dawn. We are going to sleep. It is our Dusk.

We are entering the Night-Cycle. The Arab Word is entering the Day-Cycle. We are changing places. They are rising and we are falling.

This will not be an easy time for us – but we need to go through hardship so that we can be more than superficial suburban consumers. We have philosophy and art to created; we have new worlds of knowledge to experience, knowledge of the inner dimension.

The European right is rising to face the Arab rising. American leadership will be overthrown in Europe. More spending and more debt – the Bernanke Doctrine – will destroy the European Union, state by state. Europe won’t follow America. Europe will have to follow Germany.

France is now moving into the nationalism/austerity cycle of the Le Pen leadership and will be Germany’s ally in this. European social survival will be threatened; European identify will be challenged by Arab and Muslim militancy both inside Europe and in the Middle East. Germany’s austerity will breed austerity through all of Europe. Social chaos – based on bankruptcy -- will divide these societies into class warfares, and in to religious uprisings – and fascist movements.

Day-Cycles are about Man’s glory through machinery and civlization. Night-Cycles are about the death of the machine, and a fall the Earthly reality, as the Heavenly world of abundance disappears. Night-Cycles are about God’s glory, a new-born plant rising up out of the Darkness.

All the trillions of dollars the government is now throwing or is planning to throw at the collapsing financial balloon of the global economy will not stop the ship from sinking. This depression will not bottom out until that alarm clock goes off again, signaling the Midnight of the Time Wheel (2019) – when the light is actually re-born as a weak force -- leading to a New Dawn of strength (2028), when the necessary deflation will have finally been accomplished. The Next Dawn-to-Dusk Day-Cycle will run from 2028 to 2046 – the next Greed Crisis and wounding of the Sun Hero will occur at approximately 2037, at the apex of Day-Cycle energy expansion.

The Day-Cycles implies the ‘weak force’ transforming into the ‘strong, binding force’, the transition from the sub-atomic force (subjective in nature) to the atomic-force (objective in nature). The Night-Cycle, in contrast, implies the strong, secure atomic force being transformed again into the ‘under water’ weak sub-atomic force.

We will look at this question more deeply later.

STARTHERE

Alan Greenspan Knows the Importance of Stock Market Bubbles to America’s Sense of Well-Being.

QE: Qualludes (for) Everyone. Ben Bernanke Blows Another Bubble.

How important is it for American business to have American consumers profiting from a surging stock market? Very important, if you believe Alan Greenspan. Interviewed by Reuters in September 2007, Greenspan said: "Unless stock prices resume their pace of increase of earlier this year, U.S. consumer spending and GDP will be under pressure from declining household wealth."

Then, again, in 2010, speaking on Meet the Press, Greenspan echoed this message: “It's important to remember that equity values, stock prices, are not just paper profits. They actually have a profoundly important impact on economic activity. And if stock prices start continuing down, I would get very concerned.”

It was as though Greenspan was sending a rather pointed message to Ben Bernanke, through the press. Bernanke needed to make sure that stocks gained and that Americans got back into stocks so that this secondary pipeline income did not dry up along with the mortgage refinance pipeline. Both knew there was a mechanism in place by which the Fed and the Treasury and the White House could help engender stock market rallies.

Of course, that’s one of things that QE (baby version, second-generation version, third-generation version…will QE ever end?) is all about. Yes, we know that QE is primarily a back-door continuing bank bailout, one that can be done with euphemisms and tricks and convoluted-sounding financial concepts to complex for most Americans to comprehend, unlike obvious government ‘bailouts’ where American citizens send money directly through their congressional servants to banks for repair of bank budget sheets and more debt for the rest of Americans.. Oh, yes, Americans did get something back from the banks. What do you get back when the government loans banks money from the US Treasury at less than 1% interest? Yes, it wasn’t much.

So, first, QE is about saving the banks (and the bankers). In fact, the Federal Reserve works for international bankers, not for America, and certainly not for Americans. It is, as this system is currently set up, the responsibility of the Congress to protect Americans from abuse of power by the Fed. Congress did not protect Americans from the many billions taken from the US Treasury by Henry Paulson and redistributed to Wall Street banks and bankers. Redistribution of wealth to the richest Americans, and to many rich forieigners also, European bankers.

Congress is not protecting Americans today from Bernanke’s continuing bailout, Quantative Easing – that is, welfare for Wall Street and Wall Street’s friends continues – and most Americans simply smile and say: “It’s not a bail-out, it’s that ‘quantatative’ something or other….”

Most Americans don’t realize why Quantative Easing and 0% interest rates and +0% loans to American banks are actually forms of theft from the public treasury and are designed to force unsuspecting American citizens to take their life-savings out of the banks and throw the money into dangerous stock markets, commodity markets, or into real estate.

Isn’t saving money for the future what Americans should be doing today, a smart thing to do to re-build the strength of the American nation? Yes, it is. Common sense knows that saving is good. But the Wall Street vultures can’t get their hands on Americans’ money if it is tucked safely away in a savings account paying a decent rate of interest. Wall Street does not want you to put your money in to a safe bank that pays you interest to borrow your money. It’s a LOT better for bankers to have you borrow their money and have you pay them to use their (is it really their?) money. It’s a lot better for Wall Street if you are chasing dreams of making big money and paying Wall Street fees to use their premises – or giving Wall Street all of your money and asking them to make you a rich, aristocrat like they have done for themselves. Of course, one must remember the Bernie Madoff Factor, which is more widespread on Wall Street than people believe.

Madoff, in an interview from his prison cell in 2010, said that banks and hedge funds ‘were complicit’ in his ponzi scheme to steal billions from Wall Street investors, that the “whole new regulatory reform is a joke”, and that the ‘entire government is a gigantic ponzi scheme.’

One needs to be very careful who they trust apparently.

So, returning to the central idea of this section, the first point of QE is to save the banks. Second, the Fed wants to put a ceiling on interest rates, by being the buyer of last resort of US Treasury Bonds, to keep interest rates from rising, which would choke off borrowing, and, thereby, strangle the imaginary ‘recovery’ of the global economy, and force up mortgage rates, which, over time, would cause house prices to sink even more, causing American consumers ‘wealth quotient’ to evaporate even more rapidly, causing more defaults on loans, and more losses for…you guessed it, the banks.

Bernanke had a plan to quietly devalue the US Dollar. But if he did this, the market for US Treasuries might respond, fewer buyers might appear, and rates would rise – it was even possible that the markets in US Treasury Bonds might suddenly – as the Dollar sank through more and more government borrowing to feed the bank-bailout beast – skyrocket, becoming junk bonds, like what happened in Europe with Greek, then Irish, then Spanish, then Portuguese…government bonds.

The government needed to be the TBond buyer of last resort to keep T-Bonds from becoming junk bonds, and having buyers desert the markets even faster. So he played ‘extend and pretend’. His goal was to use massive amounts of borrowed money (which immediately became more tax-payer debt) to extend the window on facing the truth about debt-default and pretend that there really was no depression, just a garden-variety recession, out of which America and the global economy would eventually grow making the debt crisis simply evaporate in the face of greater and greater profits. Becoming richer and richer would make the large debts today become smaller and smaller tomorrow, in contast. To do this, of course, the world needed inflation.

How would this work exactly? Well, it would not work unless the economy could enter again a cyclical growth period, expand again and make America’s bloated debt structure shrink set against an expanding Gross Domestic Product. Growth would render the debt unimportant because growth would allow debtors, with profits expanding again, pay-off debts and refinance back to continuing lower interest rates. More cash takes care of all our problems, doesn’t it?

There was the missing piece to this puzzle however, one that Dr. Ben apparently did not see – or, perhaps, refused to recognize or admit publicly -- from studying Japan’s extend and pretend policy. Perhaps there was an incontrovertible law that Doctor Bernanke had left out of his formula. Perhaps the economy could not grow until the suffocating debt-level was … mitigated. Perhaps debts are the weeds that suffocate the garden’s new growth.

Afterall, in my own vernacula: Debt is the full cup that needs to be emptied out before real growth can begin again. The full cup acted like weeds in the garden.

Political Agenda: Transfering Both ‘Toxic Debt’ and Guilt For the Financial Collapse from Wall Street To Washinton – Then Blaming the Catastrophe on Too Much ‘Socialist’ Spending By the Government: Joe McCarthy Would Be Proud

Transferring worthless bank debt (bad mortgage, commercial property and consumer loans, which are currently hidden on bank books, hidden by games like extend and pretend, squatting on interest rates, and the elimination of mark-to-market accounting rules so that banks could appear solvent and not report current losses when loans were scaled to the actual markets of the day) to the government has clearly made it appear that banks are at least limping toward solvency. (Of course, this sleight-of-hand magic act did not make the debt go away; the banks simply transferred bad loans to the government. And, suddenly, governments became insolvent.) And suddenly, political gamesmanship changed the blame-game 180 percent: instead of having Americans turn on banks and bad capitalism, they were instructed to turn on bad government and ‘socialism’ – thesse were the true causes of all the banks’ and the global economy’s problems. Government was spending too much – that’s why the world was suddenly broke – not because the banks’ greed had mis-fired, and suddenly sank the system in 2008. Not because billions of dollars of real wealth (what does real mean in such a context) was essentially given to the banks so that they might pretend they were again healthy, even as governments suddenly got to inherit the toxicity that the banks had created.

The reason the governments of Greece and Ireland and Spain and Portugal and America and England and Japan (earlier) were suddenly incompetent was because they had all taken on the bad decisions made by the bad capitalists who actually owned and ran their respective countries, through the auspices of supposedly democratic governments. Now, suddenly again, instead of banks laying off people who made massive amounts of money annually and going into bankruptcy (banks did lay off some people in fact, mostly entry-level types), governments were being forced to lay-off people who made very little money and face the monster of default they had absorbed from the terrified and threatening bankers – governments were required to perform austerity rituals: mea culpa, mea culpa, mea culpa, I am sorry for these sins and for the sins of my brothers.

Conservative politicians could not believe their good fortune when governments actually agreed to eat the banks’ mistakes instead of simply letting the banks fail and letting new, smaller, perhaps more ethical banks rise up in their place. Instead of voters screaming for the heads of bankers and greedy capitalists, voters were being convinced, through a form of mirror logic, that government, not Wall Street, was responsible for the collapse -- voters should be screaming for the heads of imcompetent governors, senators, Congressmen and woman, presidents (if they were Democratic presidents), and especially government workers, with their unrealistic pension plans, and their gravy-train jobs that made a mockery of the lives of hard-working Americans who made an ‘honest’ living. We were broke because government simply spent too much.

Another half-truth of course. Government did spend too much. And government did not tax the rich enough. The Republicans avoided the second truth in this full equation, as the Democrats avoided the first truth.

Instead of being in the hot seat, which is where they belonged, conservative capitalists not only transferred bad loans from private banks and corporations to the government, they also transferred guilt for the crisis from themselves to the same governments that were trying to save the banks and bankers by taking responsibility for their mess.

Government workers became the sacrificial lambs, the scapegoats. The Day-Cycle bullies had found someone to whom they could outsource their own guilt, and attempt to maintain their political power. If they bullied hard enough (remember Tail-Gunner Joe McCarthy) maybe they could put everything on Obama and make a sacrificial lamb out of him, out of all liberals – hell, all they had to do is call them all ‘socialists’ and America screamed and the liberals looked for a hole in which to crawl. It had worked that way before for the Republicans; it could probably work that way again.

So government workers lost their jobs, lost their benefits, lost their union rights to bargain for a better future – and nothing happened to the banks and bankers – a few lost their jobs -- except being given more free money to play with in the currency-markets playing the carry-trade – which, let us not forget, is a risy trade -- who continued to give themselves billions of dollars in bonuses, presumably because they were doing such a wonderful job – doing God’s work as we had all been told before, by God’s own emissary, the bloated Lloyd Blakfein, who is playing Beelzebub in the movie version of this book.

Satan, Beelzebug, and the Devil’s Apprentice Neil Kashkari (what a name: ‘he who kneels and carries the cash’)

When did the Devil begin marking his servants with shaved heads and with dramatically-bent fingers?

Did government workers really cause the financial meltdown in 2008? To hear conservative defenders of capitalism speak, those who successfully transferred both ‘toxic loans’ and toxic guilt for the massacre of trillions through blatant gambling for huge fees and profits to Big Government: yes, one would have to conclude that government worker, with their undeserved pensions and ‘entitlement philosophy’ did cause the crash. Public entitlements (‘socialist doctrine’ – Obama was another Lenin, if not a black Karl Marx) became the obvious cause of the crash – not Wall Street greed, and bubbles manufactured by banks working with the Federal Reserve.

Surprising to me, suddenly, magically, it was government spending that had bankrupted the capitalist system and broken the back of capitalism. Capitalism was the victim, not the perpetrator of the fraud, the ponzi scheme that had collapsed. Not only that: it was the home owner, the borrower, the fraudulent borrower, who had committed fraud on the banks by not revealing their own guilt in misleading honest bankers as to their qualifications to buy a home --- and honest bankers, who had been tricked by dishonest borrowers, and even more so bullied by liberal government socialists to lend to blacks and Mexicans and immigrants (legal and especially illegal) and other poor non-white Protestants – attempting to force some kind of material equality down the throats of real Americans – this is what sank the ship of America, not the crimes of the rich and the greed of the rich.

Big Government, again, was the villain – even though Big Government was absorbing the crimes, the sins, and the obvious stupidity of Big Business, and deflecting public attention away from the fraud and criminality on Wall Street, with which Big Government was also complicit. Yes, Big Government was not innocent in all of this: Big Government working with Big Business was a form of State Capitalism, economic fascism – and there was much to hide, on all fronts, from the cognizance of the American public – because both sides of the equation had blood money on their hands, and millions of corrupt dollars hidden in some offshore bank account.

The solution: let’s drag the government worker to the whipping post and punish him for his ‘gravy train’ values, for his lazy “over-tax, over-spend” socialist philosophy, his ‘I’m entltled” mindset – Wall Street could turn this negative into a positive if it was creative enough (read ‘duplicitous’) – they might even be able to destroy the last refuge of labor unions in America – those representing government workers.

Why were the government workers picked for this role as sacrificial animal? They were poor, they had no real power – any power they did have, to bargain collectively for wages and benefits – and because labor unions had always been the target of the Republican Conservatives. Destruction of the Labor Unions in America meant more money – higher profits – for Aemrican Business.

More devils peering out on their enemies. Did these people really cause the Great Depression of 2008?

Wall Street had been on the ropes, having caused the worst economic collapse in global history – and having engineering the greatest looting of public moneys in the history of the world in view of everyone -- but they, the Devil’s brood, could still turn the tide of public opinion if they could convince the public to blame America’s perennial ‘whipping boy’ – the Night-Cycle elements, the females, the losers, the dark-skinned races who didn’t speak English well, and the working poor, the laborers in America, who were mostly no better than slaves as far as their abilities and intelligence went – if they had any talent they would be rich, right?– blame them for all the troubles in the world: let’s blame the socialists.

If America would take the bait, then everything would be alright in the world again: the capitalists, the crooks, the winners, would be off the hook again.

This was an unbelievable escape act – engineered by Bernanke and his friends on Wall Street, and the Republican National Committee, and the budding political right, the so-called ‘Tea Party” revolutionaries who blamed Big Government for everything and promised that Big Business free of intrusions from Big Government, would make everything right again -- an escape act that would have made Houdini proud.

Indeed, hadn’t Big Government free of intrusions by Big Government (with whom Big Business was now in bed) just crashed the Pequod into the Great White Whale they mistook for an imaginary iceberg?

Instead of being blamed for the crisis they had caused, Wall Street (who said Bernanke was not a magician?) made the public look somewhere else while they transferred all their losses from their own books to the government books, and then insisted on blaming the government for their own irresponsible gambling and destruction of America’s future. Social security? That was what had destroyed the global financial system in 2008. Obama’s national health plan? That was the real cause of the 2008 economic meltdown. The great American Capitalist System could not recover until the Obama Health Plan was repealed because Obama’s Health Plan had added so much burden to American Business that they just had to (they had no other choice if they wanted to keep competitive and keep earning those billion dollar bonuses) keep sending jobs to Mexico or Vietnam or China. American Business just could not complete under the existing burden of excess government spending on socialist social programs, given Obama’s expropriation of corporate wealth and redistruction of capital to the poor – profits that were, by Natural Right and by Natural Selection, the ‘property’ of the capitalist business owners who had made America great. The socialists would not be satisfied until they stolen all the property of those in society who were actually winners, actually successful, the ones who generated wealth. Obama’s ‘natural constituency’ (the losers) could not generate wealth; they could only absorb wealth made by society’s winners, the capitalists themselves.

Let’s just blame the socialists – that’s what we’ve always done – it’s almost always worked before – except for the damn Sixties and Seventies. Something went terribly wrong then.

Such lies, misdirections, felonies and misdemeanors would not not only have made Houdini proud, they would have also have made Joe McCarthy proud.

Was America going to become polarized again, the rich (and the religious poor) against the non-religious Middle Class which was becoming poorer by the second. All the rich had to do was appeal to the religious or patriotic emotional natures of America’s working class – and then both the rich and the poor would stand against America’s weakening Middle Class. The rich could also start a war and have America’s frustration burn against some external enemy, transferring guilt to an outside shadow, as they had transferred guilt to an inside shadow in Wisconsin.

Day-Cycle Mechanism:Blame the Socialists For Everything.

Bernanke’s Mechanism: Let the Government Engineer Another Stock Market Rallly To Relieve Pressure in the Anti-Matter Balloon That Was Now Growing and Getting Stronger.

Capitalists blaming Socialists is the operating mechanism that triumphs during the Day-Cycle. Socialists getting even with Capitalists (Revolution) is the operating mechanism that gains power during the Night-Cycle.

The Light blames the Shadow for all the problems of the world. Overfilling the full glass is a contuation of this ethic – blaming the poor; blaming government workers, and blaming ‘too generous’ liberal government policies -- the “Entitlement Factor” -- which keeps the eyes of the Conservative Poor firmly locked on their supposed enemy, the Liberal Middle Class Poor, instead of on the real cause of their misery, the Conservative Rich who have shipped all their jobs overseas, and who keep starting wars that the Conservative Religious Poor get to fight for them. Keeping the blame focused on the society’s weaker elements – scapegoating – has always worked for those in control of a society

The Rich are not to be blamed for greed and corruption. It is the Poor who are lazy, the Poor who are corrupt and weak and talentless and drug-addicted, made that way because of reliance on government programs supporting welfare, oversized pensions, unemployment benefits – government give-aways -- which entitlements were ruining America. (And don’t point out again the trillions in government give-aways to Wall Street! I’m tired of hearing about it! Wall Street are winners! The poor in America are losers! They will always be losers! They will always be more trouble than they are worth! Hard work and cunning and innovation turn poor people into rich people – government welfare does not do this!)

I have said before that I, myself, as a form of balance, am on both sides, at different times – and I will explain what I mean by this and illustrate this through autobiographical material in the second part of this book.

Darwin rightly understood that the weak species need to die out, and the successful species need to be supported by…government welfare. Bank bailouts were right and proper because the Rich were the ‘chosen people’, the ‘fittest to survive’: the Poor, in truth, were expendable, proper ‘absorbers’ of public shame and little more than slave-matter for the rich, the famous and the talented to use as they saw fit.

The color Black absorbed all colors. The Black Night-Cycle Shadows should absorb all of society’s shame, blame and humiliation. That was their role afterall; that was their job.

And one good turn deserves another. If Bernanke was giving almost-free money to banks, he required that the banks and bankers return the favor. He wanted stocks to appreciate. A good old fashioned bull market in stocks might be just what the doctor ordered. He still had plans to continue to suffocate mortgage rates and try to force another asset bubble in housing to save the world from price deflation and subsequent debtor and creditor destruction. If this didn’t work, then both the government (current co-holder of bad bank debts) and the banks would be suddenly (again) insolvent – as the economy would crash and more and more unemployment would lead to more and more debt defaults – and, this time, the government might not be so foolish to buy/absorb these ‘toxic loans’ and agree to store these (as Warren Buffett called them) ‘financial instruments of mass destruction’ within their own Washington DC compound.

Bernanke needed stocks to rise – and Greenspan was counseling him that this was where he needed to focus his energy – since consumers needed (1) to believe the depression was over, a huge psychologic hurdle had been formed, through a darkening sense of a future with diminishing opportunity; (2) more money to spend (profits from investment in stocks) so that real growth could lead to a real recovery, government stimulus being only a bridge to the New Future, not the New Future itself.

Banks wanted to sell their toxic debt to the government; sell it at face-value. That is, not marked-to-market, its current vale, but at mark-to-fantasy market: what it would be worth once the market came back and continued making new highs.

Bernanke wanted stocks to go up; Bernake insisted that the banks re-invest the free-money the banks received from Bernanke (profits on the sale of toxic loans at higher asking prices; and +0% loans from the government) in American stocks. Bernanke promised to fix the stock markets (privately promised this, I believe) as he had promised to fix the bond market (this he promised publicly, with his description of the policy of Quantative Easing). Bernanke guaranteed, through QE, profits for anyone buying US T-Bonds, because he, Bernanke, would personally (through Fed policy) buy all the bonds on the market that no one else wanted, keeping a ceiling on interest rates – a floor under bond prices.

Did he make a similar promise about stocks? Not publicly. But suddenly the stock market started behaving like it was also fixed. The markets began to rally on very weak volume. That is, there was just enough buying to keep stocks advancing. No one, suddenly, was selling. Large program buying occurred when market tops began to appear, short-circuiting corrections.

Was the Fed managing the stock market, buying just enough to keep stocks appreciating?

Andy Kessler, in his article “What’s Really Behind Bernanke’s Easing”, figured out what QE was really all about and wrote about it in the Wall Street Journal in November 2010..

Mr. Bernanke claimed earlier this month in a Washington Post op-ed that "higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending." But, as Mr. Bernanke must know, the Japanese have been trying to influence their stock market for 20 years, with little effect on their economy. It is also unlikely, as some claim, that the Fed chairman is whipping up a stealth stimulus or orchestrating a currency devaluation [I believe he is orchestrating a currency devaluation by stealth, by QE]. He knows these have been tried and are more likely to destroy jobs than create them [and I also think he does know this, but he has other interests at the moment].

In a normal economic recovery, the stock market rises in anticipation of higher corporate profits. Companies then use their higher stock prices to raise capital and hire workers, who buy homes and remodel kitchens.

Before growth can occur, however, we have to fix what caused a recession in the first place. Often that means drawing down inventory that built up in the last boom, or tightening credit to whip inflation, as then-Fed Chairman Paul Volcker did in 1981. In late 2010, though, we still have banks overstuffed with toxic real estate loans and derivatives. But what about the trillion in bank reserves sitting at the Fed and earning 0.25% interest? Why isn't it being lent out? Perhaps because it's needed to offset unrealized losses on these fouled loans.

I have a different explanation for the Fed's latest easing program: Without another $600 billion floating through the economy, Mr. Bernanke must believe that real estate (residential and commercial) would quickly drop, endangering banks.

Mr. Bernanke is clearly buying time with our dollars. If real estate drops, we're back to September 2008 in a hurry. On Wednesday, the Fed announced that all 19 banks that underwent stress tests in 2009 need to pass another one. This suggests central bankers are nervous about real-estate loans and derivatives on bank balance sheets. In 2009, even with TARP money injected directly into their balance sheets, banks faced a $75 billion capital shortfall. Mr. Bernanke orchestrated a stock market rally so they could sell equity for much needed capital.

Kessler says it oh so calmly: ‘Mr. Bernanke orchestrated a stock market rally…” – for the banks, of course; and for American spiritual sustenance. Can the Chair of the Federal Reserve orchestrate a stock market rally any time he wishes? Is that legal? Is it legal to tell friends in the banking industry to invest in stocks, and that the Chair of the Federal Reserve will guarantee stocks go up? Is that how business works in the US, in the world, in the ‘free market’ system? Is that how Big Money becomes Big Money: by fixing the game?

Could the Fed control the undisciplined flow of capital markets, with a partnership set up with, let’s say, large investment banks, insuring stocks appreciate, even if it was not illegal? (Was that what Lloyd Blankfein meant when he said that he (and presumably other bankers) were ‘doing God’s work’? Is that what Tim Geitehrner was doing calling Lloyd Blankfein )

Could someone ‘fix’ the stock market? Is there a simple mechanism to do this?

Former Federal Reserve Board member, Robert Heller, says yes, there is; this could be done. Writing in the Wall Street Journal, Heller suggested: "Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.”

The Fed Buys Another Stock Market Rally

Following the first stock market rally after the 2008 crash, Alex Dumortier wrote an article for the Motley Fool financial web site entitled “Is Fed Buying Behind the Stock Rally?” In January 2010, Dumortier wrote:

Do we have the Federal Reserve to thank for the recent stock rally? The only logical answer is yes, according to TrimTabs, a research firm that tracks money flows in and out of the stock market. As I read the title of their report, I thought it might be a mad-hatter conspiracy theory, but the analysis is rather compelling. If they are correct, it could have significant implications for the longevity of the powerful rally that lifted the market from its March lows last year.

Following the cash
. Here's the line of reasoning: U.S. stocks gained $6 trillion in aggregate market value starting in mid-March. According to TrimTabs, historically, increases in stock market value require a net cash inflow into stocks equivalent to 10% of the increase, or $600 billion in this instance. However, the firm couldn't trace the origins of anything close to that sum from among traditional market participants

TrimTabs analysis claimed that (1) corporations were net sellers of stocks during the period of the rally; (2) the inflow from individuals was insignificant ($17 billion); (3) foreign investors did puchas $109 billion of US stocks; (4) pension funds bought no more than $100 billion of US stocks during this rally; (5) hedge funds suffered an outflow of $12 billion of their own from April through November of that same period.

Dumortier concluded: “If TrimTabs is right, we're far short of the $600 billion needed to fuel the rally we witnessed. But would a central bank intervene directly in its equity markets? Although unorthodox, this has occurred (at least) three times -- in two advanced economies, no less -- since 1998.”

Ron Paul, Congressman from Texas, has been pushing for years for the Federal Reserve Open Market Committee to open up its accounting books to public scrutiny. He has written and sponsored bills to audit the Fed. The Fed, of course, has vocally resisted this. Why? Because the Fed can spend money – and give away money apparently – wherever and to whomever and whenever it wants. And the Fed likes it that way.

Has the Fed been pumping up markets since 1987? That is one allegation against the Fed. Did the Fed give American taxpayers’ money to foreign banks after the 2008 financial meltdown? That is another claim by adversaries of the Fed’s unlimited authority.

A Fed audit would answer these questions quickly, putting such accusations to rest once and for all, if they are unfounded. Of course, if proven to be true – this could easily be a hornet’s nest leading to political reorganization – then outrage of American citizens might lead to the complete destruction of the Federal Reserve System. The Fed is fighting against disclosure because the Fed is also fighting for its life. Secrecy is the only weapon the Fed has at the moment giving it an advantage.

America either needs to overthrow the Fed or to make it more transparent, and limit its power. The Fed is now an invisible government, stronger in many ways than the democratically-elected US government. The US government can declare war and vote to wage war; but can they get the money to pay for the fighting of the war? If there is no money to fight a war, then a war really can’t be declared and waged, can it?

Which brings up, inevitably I guess, the “Plunge Protection Team”. The Plunge Protection Team is a governmental committee made up of the top Washington officials, including the US President, the stated goal of which is the manipulate the stock markets and to make sure that stocks don’t collapse, thereby ruining the whole Tea Party.

Steve Christ, writing in WealthDaily in 2009, penned an article, “The Plunge Protection Team: How the Invisible Hand Moves the Markets”.

To the millions of tourists who have driven down San Francisco's Lombard Street, it is easily the "crookedest street in the world." Steep and full of sharp turns, it's an oddity as recognizable as the city's Golden Gate Bridge.

But as familiar as that street is to everyone who has driven it or seen it in a movie, Lombard Street has nothing on the winding road that has been built between Washington and Wall Street.

Bailouts and back-room deals— it's as crooked as it gets.

And in a financial crisis that is by all accounts the worst of our generation, the deep connection between the two has become even more tightly twisted. It's pretty obvious that the survival of one depends wholly on the survival of the other. And while I've never been a big fan of conspiracy theories, this twisted alliance of power and greed has made me reconsider at least one... It's called the Plunge Protection Team.

The Plunge Protection Team Is No Myth  

And according to the lore, it has been propping up the markets for the last 20 years. And the truth is, if it didn't already exist, the current crisis is big enough to give birth to it, in my opinion. But before I go any further, let me get something straight. . .

The Plunge Protection Team (PPT) is not some urban myth or Oliver Stone-style conspiracy theory. The truth is it's hidden in plain sight, even though the U.S. Government prefers to be tight lipped about it.

Born out of the 1987 crash, the team is formally known as the Working Group on Financial Markets. It was created by Executive Order 12631, signed on March 18, 1988 by President Reagan.

And under Sec. 2 of the order, its "Purposes and Functions" were stated as follows:

(2) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:

• the major issues raised by the numerous studies on the events (pertaining to the)

October 19, 1987 (market crash and consider) recommendations that have the

potential to achieve the goals noted above; and

• governmental (and other) actions under existing laws and regulations. . . that are

appropriate to carry out these recommendations.

 Working in secret, the group consists of

• the President

• the Treasury Secretary as chairman;

• the Fed chairman;

• the SEC chairman;

• and the Commodity Futures Trading Commission chairman.

The seeds of the Plunge Protection Team were first planted by Robert Heller, a former Fed governor (see above, for the same Mr. Heller’s explanation of how ‘fixing the markets’ could be easily and quietly accomplished). Heller was a first-hand witness to the '87 crash, later writing:

“Everybody's attention was tightly focused on containing the damage and preventing a spread of the financial disruptions throughout the financial system. Do not forget that at that time we were also dealing with a severe S&L crisis and almost 200 bank failures per year. Without swift supportive action on behalf of the Fed, the stock market crash could well have been the straw that broke the back of an already weak camel. “

Now, if that doesn't sound a wee bit familiar, then you just haven't been paying attention… Heller's plan, in short, was really quite simple— the government could simply bid up the futures until the market plunge reversed.

Since then, the PPT has been the number-one suspect in generating one "stick save" after another, especially at moments when all seemed lost.

Keep in mind, this type of manipulation is entirely possible if the bid beneath these futures is strong enough. Moreover, just imagine the type of reversal Goldman Sachs and JP Morgan could generate with a concerted effort to buy S&P 500 index futures late in the day. [Keep in mind that three of the last 6 Secretaries of the Treasury --who does sit on the Plunge Protection Team – worked for and have strong ties to and roots with, Goldman Sachs investment bank. This puts the ears of Goldman Sachs at the table when the PPT is discussing goosing the markets and/or pulling back and letting a correction happen.]

Needless to say, it would be more than enough to turn the markets from red to green in the blink of an eye— which is an outcome that would undoubtedly work for both parties if it headed off a total collapse.

And if it buries a few shorts along the way, so be it.

The (In)Visible Hand

Given the dramatic bounce off of the March lows, the latest crisis has only raised more suspicions. In fact, as recently as April, a number of observers noticed some unusual patterns in the "program trading" on the New York Stock Exchange, suggesting someone may indeed be working to "prop up" the market with large amounts of buying.

Even more suspicious was the fact that the largest trader — with a volume 5 times higher than anyone else — was none other than Goldman Sachs. . . a firm that shares an extremely cozy relationship with the boys in D.C.

Never mind that unemployment is headed higher, foreclosures are still skyrocketing, and housing is nowhere near the bottom. That would only put a damper on things. Instead, the markets have been sent higher on very light volume. Any trader will tell you that makes them even more susceptible to manipulation.

All of which bring us back to the Bernanke Fed and the current crisis. All along the way, the Fed has promised to "employ all available tools to promote economic recovery and to preserve price stability." Is it really that hard to believe they would stick their hands into equities, after attempting to jawbone everything in their path in an effort to "fix" the crisis? I don't think it is— even though no one has proven it. After all, desperate times call for desperate measures. And for these folks, the end justifies the means.

This became a rather long digression I admit, but not without its point.

Many Americans might argue: what’s so wrong with fixing the markets so they can only go up? Most Americans benefit from a stock market only when stock prices go up. Only speculators and dark elements without loyalty willing to short American companies seem to benefit when the stock market falls. This is a half-truth, but one that has a lot of emotional support and one that can be and is used by politicians when it is in their interest to do so. Painting the Shadow with a brush of disloyalty and criminality is a very old human trait – some may even say that I have been doing this, and it is true – but I will paint both sides with a brush of disloyality and criminality before I am through -- and has left a long ugly trail through American political history, showing the racism inherent in the Day-Cycle when Day-Cycle energy attempts to resist the end of the Day and transition into the less competitive Night-Cycle. Blame the Socialists. Blame the American Indians. Blame the Blacks. Blame the women. Blame the Jews.

Is the market rigged? Does someone, or some type, or some specific firm of people have an unfair advantage? This is another digression – I will warn the reader ahead this time.

Goldman Sachs seems to run a fixed game. They get alumnae put in place to run the US Treasury Office, with three of the last five Treasury Secretaries men who have made billions while working for Goldman, and who made need a job to go back to someday. The Secretary of the Treasury sits on the Plunge Protection Teach with the US President and the Fed Chair, where they apparently decide if stocks need a supercharge in order to keep from going down.

Lloyd Blankfein seems to have a loyal protégé in place as the current Treasury Department Secretary, Tim Geithner, who made

BUSINESS INSIDER

Goldman Traders Did Not Have A SINGLE Losing Day Last Quarter... So Why Are Partners Freaking Out About Tons Of Demotions?

Courtney Comstock | May 10, 2010

GOSSIP: Today's Wall Street Buzz In 60 Seconds

•KKR Just Tapped This Goldman Prop Trading

Superstar To Run Its Real Estate Business

•Morgan Stanley Is Laying Off 200-300 Junior Employees

This morning there is both good and bad news for Goldman.

The good news is that Goldman traders turned in a mind-boggling perfect quarter, according to Bloomberg, meaning Goldman profited every day last quarter for the first time ever. That's got to feel awesome after all that happened last month, though really it just makes it seem like the game is rigged.

Couldn't they have purposely lost money on a couple of days?

Meanwhile there's also a report in the Financial Times saying that Goldman execs are freaking out about Goldman's cutting back the number of employees named partner this year or demoting a number of people.

A year later, Goldman Sachs would be floundering, relatively speaking. For the quarter ending June 2010, Goldman actually had ten days of trading when they lost money. On the bright side, Goldman had seventeen days during which they made profits of more than $100 million.

Did Goldman have a secret formula, or did they just part their car near the back door of the Stock Exchange and raid the primises when everyone else was on a lunch break? Well, in a way, they were doing both.

An issue that concerns this writer at this moment, of course, is who knows when the Fed and PPT is going to give markets a stimulus booster-shot? And who doesn’t know? And who knows when the booster shot is going to be removed – when the ritual goosing is coming to an end? If the market is fair, we should all know at the same time, shouldn’t we?

Do the small clique of leaders sitting on the PPT committee keep all of this information absolutely secret? We have pointed out why Goldman Sachs probably has a clear advantage – and their trading over the last decade seems to indicate they have had an (invisible) advantage. Which other individuals or family members or friends of friends are also trading with the Fed, because of an unnamed source telling them when to get in to the market, when to stay in, and when to leave?

Is it important that the equities markets be fair? We know that Big Money has an advantage in everything they do. Is that ok with us, that Big Money gets to cheat to become more successful? Is that ok with those of us who are Small Money? If it is ok with us, we are probably on our way back to feudalism again – apathy will cost us dearly in historical time. Big Money will cheat and steal, if they are allowed to do it. That’s one of the ways they got their money, and how they got big in the first place – and we risk a lot if we forget this.

Big Money won’t police themselves. One of the necessary jobs of government’s is to police Big Money. The bigger Big Money is, the larger Big Government has to be. This is a very strong argument in favor of pruning both Big Business and Big Government at the same time.

Goldman Perfection: Is the Game Fixed?

If ‘Front-Running’ is Illegal, Why Isn’t Computerized Front-Running Illegal?

Unconnected to the criminality of the Housing Bubble and the theft of billions of government taxpayer money by Hank Paulson, Ben Bernanke and Tim Geithner for the (largely) White Protestant Mafia Wall Street, there is another crime on Wall Street that has been perfected by Goldman Sachs – hence there near-perfect record as traders in high finance.

High-Frequency Trading it is called – and most people had never heard of it until a Russsian math-whiz immigrant working for Goldman Sachs was arrested in July 2009 at the Newark Liberty International Airport trying to leave the country with a Goldman Sachs HFT computer algorithm in his possession.

On July 3, 2009, Sergey Aleynikov was arrested by FBI agents at Newark Liberty International Airport after Goldman raised the alarm over a suspected security breach. He was alleged to have downloaded Goldman’s ‘secret software’ used to direct large volume, high-speed trades in stock and commodities markets often as markets are closing. At a bail hearing for Aleynikov, U.S. Assistant District Attorney Joseph Facciponti said Goldman Sachs could lose millions of dollars in the trading algorithm were to fall into the wrong hands. In an official court proceeding, federal prosecutor Joseph Facciponti told a federal judge that "[Goldman Sachs] has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways."

Goldman Sach obviously knew how to use the program. Does this mean that this program made it possible for Goldman Sachs to ‘manipulate the markets in unfair ways’? Why did this not raise a red flag? Why was Facciponti not investigating Goldman Sach’s use of the program in US and foreign markets? Were we supposed to believe that Goldman Sachs had a computer program that could allow them to make, say $100 million a dau seventeen times in a given quarter, but were not using it because of concern for ethical markets?

In her elaborately detailed article “Tax the Traders! Make Wall Street Pay its Share With a "Tobin Tax", Financial Writer Ellen Hodgson Brown describes what HFT and front-running are, and how they work.

While the SEC is busy investigating Goldman Sachs, it might want to look into another Goldman-dominated fraud: computerized front running using high-frequency trading programs.

Market commentators are fond of talking about “free market capitalism,” but according to Wall Street commentator Max Keiser, it is no more. It has morphed into what his TV co-host Stacy Herbert calls “rigged market capitalism”: all markets today are subject to manipulation for private gain.

Keiser isn’t just speculating about this. He claims to have invented one of the most widely used programs for doing the rigging. Not that that’s what he meant to invent. His patented program was designed to take the manipulation out of markets. It would do this by matching buyers with sellers automatically, eliminating “front running” – brokers buying or selling ahead of large orders coming in from their clients. The computer program was intended to remove the conflict of interest that exists when brokers who match buyers with sellers are also selling from their own accounts. But the program fell into the wrong hands and became the prototype for automated trading programs that actually facilitate front running.

Also called High Frequency Trading (HFT) or “black box trading,” automated program trading uses high-speed computers governed by complex algorithms (instructions to the computer) to analyze data and transact orders in massive quantities at very high speeds. Like the poker player peeking in a mirror to see his opponent’s cards, HFT allows the program trader to peek at major incoming orders and jump in front of them to skim profits off the top. And these large institutional orders are our money -- our pension funds, mutual funds, and 401Ks.

When “market making” (matching buyers with sellers) was done strictly by human brokers on the floor of the stock exchange, manipulations and front running were possible but were against the rules, which were strictly enforced. Front running by computer, using complex trading programs, is an entirely different species of fraud. A minor potential for cheating has morphed into a monster. Keiser maintains that computerized front running with HFT has become the principal business of Wall Street and the primary force driving most of the volume on exchanges, contributing not only to a large portion of trading profits but to the manipulation of markets for economic and political ends.

The “Virtual Specialist”: the Prototype for High Frequency Trading

Until recently, most market making was done by brokers called “specialists,” those people you see on the floor of the New York Stock Exchange haggling over the price of stocks. The job of the specialist originated over a century ago, when the need was recognized for a system for continuous trading. That meant trading even when there was no “real” buyer or seller waiting to take the other side of the trade.

The specialist is a broker who deals in a specific stock and remains at one location on the floor holding an inventory of it. He posts the “bid” and “ask” prices, manages “limit” orders, executes trades, and is responsible for managing the uninterrupted flow of orders. If there is a large shift in demand on the “buy” side or the “sell” side, the specialist steps in and sells or buys out of his own inventory to meet the demand, until the gap has narrowed.

This gives him an opportunity to trade for himself, using his inside knowledge to book a profit. That practice is frowned on by the Securities Exchange Commission (SEC), but it has never been seriously regulated, because it has been considered necessary to keep markets “liquid.”

Keiser’s “Virtual Specialist Technology” (VST) was developed for the Hollywood Stock Exchange (HSX), a web-based, multiplayer simulation in which players use virtual money to buy and sell “shares” of actors, directors, upcoming films, and film-related options. The program determines the true market price automatically, by comparing “bids” with “asks” and weighting the proportion of each. Keiser and HSX co-founder Michael Burns applied for a patent for a “computer-implemented securities trading system with a virtual specialist function” in 1996, and U.S. patent no. 5960176 was awarded in 1999.

But things went awry after the dot.com crash, when Keiser’s company HSX Holdings sold the VST patent to investment firm Cantor Fitzgerald, over his objection. Cantor Fitzgerald then put the part of the program that would have eliminated front-running on ice, just as drug companies buy up competing patents in order to take them off the market. Instead of preventing front-running, the program was altered so that it actually enhanced that fraudulent practice. Keiser (who is now based in Europe) notes that this sort of patent abuse is illegal under European Intellectual Property law.

Meanwhile, the design of the VST program remained on display at the patent office, giving other inventors ideas. To get a patent, applicants must list “prior art” and then prove that their patent is an improvement in some way. The listing for Keiser’s patent shows that it has been referenced by 132 others involving automated program trading or HFT.

Since then, HFT has quickly come to dominate the exchanges. High frequency trading firms now account for 73% of all U.S. equity trades, although they represent only 2% of the approximately 20,000 firms in operation.

In 1998, the SEC allowed online electronic communication networks, or alternative trading systems, to become full-fledged stock exchanges. Alternative trading systems (ATS) are computer-automated order-matching systems that offer exchange-like trading opportunities at lower costs but are often subject to lower disclosure requirements and different trading rules. Computer systems automatically match buy and sell orders that were themselves submitted through computers. Market making that was once done with a “specialist’s book” -- something that could be examined and audited -- is now done by an unseen, unaudited “black box.”

For over a century, the stock market was a real market, with live traders hotly bidding against each other on the floor of the exchange. In only a decade, floor trading has been eliminated in all but the largest exchanges, such as the New York Stock Exchange (NYSE); and even in those markets, it now co-exists with electronic trading.

Alternative trading systems allow just about any sizable trader to place orders directly in the market, rather than routing them through investment dealers on the NYSE. They also allow any sizable trader with a sophisticated HFT program to front run trades.

Flash Trades: How the Game Is Rigged

An integral component of computerized front running is a dubious practice called “flash trades.” Flash orders are permitted by a regulatory loophole that allows exchanges to show orders to some traders ahead of others for a fee. At one time, the NYSE allowed specialists to benefit from an advance look at incoming orders; but it has now replaced that practice with a “level playing field” policy that gives all investors equal access to all price quotes. Some ATSs, however, which are hotly competing with the established exchanges for business, have adopted the use of flash trades to pull trading business away from the exchanges. An incoming order is revealed (or flashed) to a trader for a fraction of a second before being sent to the national market system. If the trader can match the best bid or offer in the system, he can then pick up that order before the rest of the market sees it.

The flash peek reveals the trade coming in but not the limit price – the maximum price at which the buyer or seller is willing to trade. This is what the HFT program figures out, and it is what gives the high-frequency trader the same sort of inside information available to the traditional market maker: he now gets to peek at the other player’s cards. That means high-frequency traders can do more than just skim hefty profits from other investors. They can actually manipulate markets.

How this is done was explained by Karl Denninger in an insightful post on Seeking Alpha in July 2009:

Let’s say that there is a buyer willing to buy 100,000 shares of BRCM with a limit price of $26.40. That is, the buyer will accept any price up to $26.40. But the market at this particular moment in time is at $26.10, or thirty cents lower.

So the computers, having detected via their ‘flash orders’ (which ought to be illegal) that there is a desire for Broadcom shares, start to issue tiny (typically 100 share lots) ‘immediate or cancel’ orders - IOCs - to sell at $26.20. If that order is ‘eaten’ the computer then issues an order at $26.25, then $26.30, then $26.35, then $26.40. When it tries $26.45 it gets no bite and the order is immediately canceled.

Now the flush of supply comes at, big coincidence, $26.39, and the claim is made that the market has become ‘more efficient.’

Nonsense; there was no ‘real seller’ at any of these prices! This pattern of offering was intended to do one and only one thing -- manipulate the market by discovering what is supposed to be a hidden piece of information -- the other side’s limit price!

With normal order queues and flows the person with the limit order would see the offer at $26.20 and might drop his limit. But the computers are so fast that unless you own one of the same speed you have no chance to do this -- your order is immediately ‘raped’ at the full limit price! . . . [Y]ou got screwed for 29 cents per share which was quite literally stolen by the HFT firms that probed your book before you could detect the activity, determined your maximum price, and then sold to you as close to your maximum price as was possible.”

The ostensible justification for high-frequency programs is that they “improve liquidity,” but Denninger says, “Hogwash. They have turned the market into a rigged game where institutional orders (that’s you, Mr. and Mrs. Joe Public, when you buy or sell mutual funds!) are routinely screwed for the benefit of a few major international banks.”

In fact, high-frequency traders may be removing liquidity from the market. So argues John Daly in the Canadian Globe and Mail, citing Thomas Caldwell, CEO of Caldwell Securities Ltd.:

Large institutional investors know that if they start trying to push through a large block of shares at a certain price – even if the block is broken into many small trades on several ATSs and markets -- they can trigger a flood of high-frequency orders that immediately move market prices to the institution’s disadvantage. . . . That’s why institutions have flocked to so-called dark pools operated by ATSs such as Instinet, and individual dealers like Goldman Sachs. The pools allow traders to offer prices without publicly revealing their identities and tipping their hand..

Because these large, dark pools are opaque to other investors and to regulators, they inhibit the free and fair trade that depends on open and transparent auction markets to work.

The Notorious Market-Rigging Ringleader, Goldman Sachs

Tyler Durden, writing on Zero Hedge, notes that the HFT game is dominated by Goldman Sachs, which he calls “a hedge fund in all but FDIC backing.” Goldman was an investment bank until the fall of 2008, when it became a commercial bank overnight in order to capitalize on federal bailout benefits, including virtually interest-free money from the Fed that it can use to speculate on the opaque ATS exchanges where markets are manipulated and controlled.

Unlike the NYSE, which is open only from 10 am to 4 pm EST daily, ATSs trade around the clock; and they are particularly busy when the NYSE is closed, when stocks are thinly traded and easily manipulated. Tyler Durden writes:

[A]s the market keeps going up day in and day out, regardless of the deteriorating economic conditions, it is just these HFT’s that determine the overall market direction, usually without fundamental or technical reason. And based on a few lines of code, retail investors get suckered into a rising market that has nothing to do with green shoots or some Chinese firms buying a few hundred extra Intel servers: HFTs are merely perpetuating the same ponzi market mythology last seen in the Madoff case, but on a massively larger scale.

HFT rigging helps explain how Goldman Sachs earned at least $100 million per day from its trading division, day after day, on 116 out of 194 trading days through the end of September 2009. It’s like taking candy from a baby, when you can see the other players’ cards.

Reviving the Free Market

So what can be done to restore free and fair markets? A step in the right direction would be to prohibit flash trades. The SEC is proposing such rules, but they haven’t been effected yet.

Another proposed check on HFT is a Tobin tax – a very small tax on every financial trade. Proposals for the tax range from .005% to 1%, so small that it would hardly be felt by legitimate “buy and hold” investors, but high enough to kill HFT, which skims a very tiny profit from a huge number of trades.

That could work, but it might take a tax larger than .005% or even .1%. Consider Denninger’s example, in which the high-frequency trader was making not just a few pennies but a full 29 cents per trade and had an opportunity to make this sum on 99,500 shares (100,000 shares less 5 100-lot trades at lesser sums). That’s a $28,855 profit on a $2.63 million trade, not bad for a few milliseconds of work. Imposing a .1% Tobin tax on the $2.63 million would reduce the profit to $26,225, but that’s still a nice return for a trade that takes less time than blinking. A full 1%, on the other hand, would pretty well wipe out the profit and kill the trade.

Better yet, however, would be to fix the problem at its source -- the price-setting mechanism itself. Keiser says this could be done by banning HFT and installing his VST computer program in its original design in all the exchanges. The true market price would then be established automatically, foreclosing both human and electronic manipulation. He notes that the shareholders of his former firm have a good claim for voiding out the sale to Cantor Fitzgerald and retrieving the program, since the deal was never consummated and the investors in HSX Holdings have never received a penny for the sale.

There is just one problem with their legal claim: the paperwork proving it was shipped to Cantor Fitzgerald’s offices in the World Trade Center several months before September 2001. Like free market capitalism itself, it seems, the evidence has gone up in smoke

So much for doing ‘God’s Work’.

Why was there no investigation of Goldman Sachs’ use of the ‘doomsday box’ (which is apparently what Goldman called the program). Remember, Goldman argued that the Russian immigrant could have destroyed financial markets with potential misuse of this program.

Tobin Harshaw’s article, ‘Is Wall Street Picking Our Pockets?’ looks at the Denninger example (above) and comments:

Karl Denniger at the Market Ticker…thinks that the traders’ computer speed isn’t most important advantage they have. Rather, he says, the “algos,” rather than providing liquidity as they are supposed to, intentionally probe “the market with tiny orders that were immediately canceled in a scheme to gain an illegal view into the other side’s willingness to pay.” He explains:

With normal order queues and flows the person with the limit order would see the offer at $26.20 and might drop his limit. But the computers are so fast that unless you own one of the same speed you have no chance to do this – your order is immediately “raped” at the full limit price … as the fill price is in fact 30 cents a share away from where the market actually is.

A couple of years ago if you entered a limit order for $26.40 with the market at $26.10 odds are excellent that most of your order would have filled down near where the market was when you entered the order – $26.10. Today, odds are excellent that most of your order will fill at $26.39, and the HFT firms will claim this is an “efficient market.” The truth is that you got screwed for 29 cents per share which was quite literally stolen by the HFT firms that probed your book before you could detect the activity, determined your maximum price, and then sold to you as close to your maximum price as was possible.

Even if such trading isn’t illegal or inherently vile, Brett Steenbarger of TraderFeed notes, it certainly makes life hard for day-traders and others with slower access to data.

Because the high-speed algos are buying and selling quickly as a rule, their effects on the markets longer-term are unclear. A stock may still travel from point A to point B, but the computers will affect the path from A to B. This may help explain why traders I work with who are more selective in their intraday trades and who tend to hold for longer intraday swings on average have been doing better than very active daytraders.

When up to half of all stock market volume consists of these algorithmic trades, one has to wonder about the edge of very active traders. Interestingly, those that are successful may be trading new patterns that have emerged since the onslaught of the high-frequency computers. My hunch is that these new patterns would involve a keen reading of order flow, catching the shift in the bidding/offering and the location (bid/offer) of transactions in real time.

Two weeks ago, Tyler Durden’s Zero Hedge blog posted a white paper by Sal L. Arnuk and Joseph Saluzzi of the brokerage Themis Trading that clearly spelled out some big concerns about the “HFTs.”

1. HFTs provide low quality liquidity.

In the old days, when NYSE specialists or NASDAQ market makers added liquidity, they were required to maintain a fair and orderly market, and to post a quote that was part of the National Best Bid and Offer a minimum percentage of time. HFTs have no such requirements. They have no minimum shares to provide nor do they have a minimum quote time. And they could turn off their liquidity at any time. When an HFT computer spots a real order, the HFT is not likely to go against it and take the other side. The institution is then faced with a very tough stock to trade.

2. HFT volume can generate false trading signals.

This can cause other investors to buy at a higher price, or sell at a lower price, than they would otherwise. A spike in HFT volume can cause an institutional algorithm order based on a percentage of volume to be too aggressive. A spike can attract momentum investors, further exaggerating price moves. Seeing such a spike, options traders can start to build positions, which, in turn, can attract risk arbitrage traders who believe there’s potential news that could affect the stock.

3. HFT computer servers are faster than other trading systems.

Because most HFT servers are co-located at exchanges, they can beat out institutional or retail orders, causing them to pay more or sell for less than they should have for a stock.

As if that weren’t worrisome enough — the pair also raise some “what if” problems that HFTs could confront us with down the line.

1. What if a regulation like the uptick rule were enacted?

Volumes could implode and stocks that appeared highly liquid could become extremely difficult to trade with wide spreads and no depth in the quote.

2. What if a “rogue” algorithm entered the market?

Many HFTs are hedge funds that enter their orders into the market through a “sponsored access” arrangement with a broker. Many of these arrangements do not have any pre-trade risk controls since these clients demand the fastest speed. Due to the fully electronic nature of the equity markets today, one keypunch error could wreak havoc. Nothing would be able to stop a market destroying order once the button was pressed.

Durden himself has been sounding the warning for a while, likening the rest of us to Vegas suckers:

As the market keeps going up day in and day out, regardless of the deteriorating economic conditions, it is just these HFT’s that determine the overall market direction, usually without fundamental or technical reason. And based on a few lines of code, retail investors get suckered into a rising market that has nothing to do with green shoots or some Chinese firms buying a few hundred extra Intel servers: HFTs are merely perpetuating the same ponzi market mythology last seen in the Madoff case, but on a massively larger scale. When it all blows up, the question is whether the SEC will go after the perpetrators of this pyramid with the same zeal that it pursued Madoff himself. We think not

Some have speculated that the ‘Doomsday Box’ that Goldman employs to amass fractional gains per trade that generate profits of more than $100 million a day seventeen times in a quarter and the government’s Plunge Protection Team are connected, if not the same thing. The Durden quote “As the market keeps going up day in and day out, regardless of the deteriorating economic conditions, it is just these HFT’s that determine the overall market direction, usually without fundamental or technical reason” seems to be an accurate description of the ‘Bernanke Bull Run’ market rallies that have been gaining steam over the last two years.

Tyler Durden at Zero Hedge speaks of how HFT’s use ‘quote stuffing’ to make a stock (and, consequently, a market) move higher or lower, depending upon which side of the market the ‘trader’ is situated. Durden indicates that over the last 18 months – the Bernanke Bull Run era – they have rarely seen stocks ‘walked down’ through quote-stuffing, but always ‘walked up’:

Recently we posted a required reading analysis by Nanex in which the market trading analytics firm presented irrefutable evidence of quote stuffing by HFT algorithms in tens of stocks, in which thousands of cancelled quotes would reappear each second with a definitive periodicity and regularity, around the time of the May 6 flash crash.

Aside from the fact that it is illegal to indicate a quote without a trade intent, this form of quote stuffing is in fact manipulative when conducted by HFT repeaters in specific "shapes" as it actually moves the NBBO actively higher or lower, in cases pushing the bid/offer range up to 10% higher without even one trade ever having occurred, simply by masking a big block order which other algos interpret as bid interest and pull all offers progressively or step function higher (or vice versa, although we have rarely if ever seen the walking down of a stock over the past 18 months).

It is as if the HFT lobby has been given the green light by the powers that be that it is safe to activate merely the bid-size quote stuffing algorithms, and not worry: the fact that the market is so one sided in its quote stuffing patterns is sufficient reason to worry of a concerted effort to push stocks higher, initiated from the very top, and effected by not only the Primary Dealer community but by the end-market "liquidity providers."

Today, courtesy of Nanex we demonstrate that this type of illegal stock manipulation continues rampant to this very day, and the SEC still fails to acknowledge that it is precisely the HFT market participants that persist in destabilizing stock prices, which have given up responding to fundamentals and merely move up or down based on quote stuffing interventions by those who plead innocence and claim to only be providing liquidity.

Well take a look at the millions in fake, and thus illegal, bids demonstrated below and tell us just how any of this manipulation is "providing liquidity" - the second the patterns break, the algos responsible for the churn pattern disappear, thus eliminating numerous levels of so called bid liquidity below the NBBO: break enough patterns and you have another flash crash as the market once again goes bidless.

So while the SEC continues to pander merely to the interests of the market manipulation lobby, and is now doing it in more style than ever by refusing to answer to FOIA requests going forward, here is Nanex with yet more evidence that we no longer have a market, but merely a daily recurring crime scene.

In our original Flash Crash Analysis report, we dedicated a section to an observed phenomena we termed "Quote Stuffing", in which bursts of quotes (at very high rates) with extremely unusual characteristics were observed.

As we continue to monitor the markets for evidence of Quote Stuffing and Strange Sequences (Crop Circles), we find that there are dozens if not hundreds of examples to choose from on any given day. As such, this page will be updated often with charts demonstrating this activity.

The common theme with the charts shown on this page is they are obviously all generated in code and are algorithmic. Some demonstrate bizarre price or size cycling, some demonstrate large burst of quotes in extremely short time frames and some will demonstrate both. In most cases these sequences are from a single exchange with no other exchange quoting in the same time frame.

And here, for your viewing pleasure, are the illegal market manipulative churn patterns conducted exclusively by various HFT algos:

07-29-10

BATS "Flag Repeater". 15,000 quotes in 11 seconds, dropping the ASK price 1 penny each quote from $9.36 to $8.58 and back up again.

07-29-10

"The Crown". While not a large number of quotes, this NASDAQ/BATS Bidsize sequence was just too unusual to bypass.

07-28-10

BATS "Batsicles". BATS price cycling through a large price range, each intermittent with a stub quote, drop it down and start over.

07-27-10

NASDAQ "Blotter". One of the more unusual repeating Asksize cycles.

07-23-10

BATS "Stubby Triangles". Drop the quote from a valid price to 0.001 and then back up to a lower price level. When the new price level hits 0.001 as well, do it all over again at approx. 380 times a second.

07-23-10

NASDAQ "Flutter". 4000 quotes in 2 seconds, alternating the bid price/size in 3 increments and effecting the Best Bid along the way.

07-23-10

BATS "Periscopes". 8000 quotes in 3 seconds, alternating the bid price each quote. Pop the size up 1 every second or so.

07-22-10

NASDAQ "Double Dip". Symbol SH. 10,000 Quotes in 4 seconds, each affecting the Best Bid.

07-19-10

NASDAQ "Racing Stripe". Symbol WYNN. 2000 Quotes in one second, each affecting the Best Ask.

07-19-10

PACIFIC "Puzzle Pieces". Symbol IIC.

07-14-10

NASDAQ "Blue Bandsaw". Symbol SHG. (760 quotes in 1 second, taken from a total sampling of 10,000 quotes in 12 seconds)

07-13-10

BATS "60-Step". Symbol SAH. Take sixty steps up (a penny at a time) and one step down (0.60), reset and do it all over again (at approx. 700 times per second).

07-12-10

NASDAQ "Ask Mountain". Symbol IAU. Over 56,000 quotes in 10 seconds, all with same Ask Price and the Ask Size increasing or decreasing by 1 (to almost 40,000!).

Ben C at the Innoculated Investor explains the crime in a different way, and highlights some of the dangers of HFT in his article ‘High Frequency Traders are Stealing from You”. Ben writes:

The history and backdrop

Most people are well acquainted with the stock market crash that occurred on October 19th, 1987 in which the Dow Jones dropped by 508 points or 22.61%. After the fact, the largest one day percentage decline in the market’s history was mainly blamed on portfolio insurance. This was a risk management tool that employed stop losses through automatic, computer-based selling. Unfortunately, the prevalent use of this strategy caused a cascade of selling once the market started to drop. Hindsight being 20/20, commentators who opined on the events of the day of course claimed that the outcome was obvious and predictable. Clearly it should not have been a surprise that indiscriminate selling by computers could cause the market to plunge. How could anyone have believed that thoughtless machines controlling the most important stock market in the world was a good idea?

Now, here we are almost 23 years later and apparently we have learned nothing from our past mistakes. In fact, computer trading programs, or algorithms if you will, now dominate the day-to-day trading on the major exchanges. While it is difficult to quantify precisely, most estimates suggest that what is known as high frequency trading (HFT) makes up between 50% and 75% of all trades1. Let us say that again: Robots trading shares in between one another now accounts for anywhere between half and three-quarters of all market activity on a daily basis. So much for fundamental, bottom’s up investing…

The hidden HFT tax

The following is the most technical portion of this analysis. However, we think that if you are willing to stay with us, you will understand why HFT likely costs you money. The best way to explain the HFT tax is through an example. Let’s say you are a mutual fund that wants to buy one million shares of Microsoft (MSFT). This is such a large order that you are worried that you may move the market up with your trade. Therefore, in order to make sure you don’t pay more than you want per share you put in a limit order. Let’s say the stock is trading at $24.95 but you put in a limit order (i.e. the most you are willing to pay) of $25. Many mutual funds use what are known as VWAP (Volume Weighted Average Pricing) trading algorithms to execute these large trades. The problem with these algorithms is that even if they break up the buy orders in smaller batches (i.e. not all one million shares in a single trade) they create patterns that the HFT algorithms can sniff out.

Think of a VWAP kind of like an 18-wheeler trying to switch lanes on the highway. It takes a long time to move and therefore a quicker vehicle has the opportunity to outmaneuver it. This is what the HFTs do when they sense a VWAP-based order. By exploiting the predictable patterns created by the VWAP, the HFT algorithm is fast enough to sense the limit order of $25 on the MSFT shares, buy the shares at $24.95 and then sell them to the mutual fund at $25. No harm, right? The mutual fund got its trade executed at $25 and no one ever thinks twice. Wrong! The problem is that the HFT basically engaged in what is known as front running by jumping in front of the VWAP and causing the mutual fund to pay $.05 too much for each share. If this only happened every once in a while it might not be a big deal. But imagine the costs to mutual fund shareholders if this dynamic played out each and every day with thousands of stocks. We are talking about billions of dollars in potential profits for the HFTs. If you are wondering why the NYSE pre-sold ALL of its co-location spots for its new data center within a short period of time, you now have the answer.

Want to know who the major players are? Well, according to NASDAQ’s website, the top five liquidity providers for the NYSE as of July 2010 were Wedbush Morgan Securities, GETCO, Citadel Securities, Merrill Lynch and UBS Securities…

If it sounds like these firms profit from an unfair and uneven market structure, it is because that is precisely the case. But why is this inequity tolerated and often cited as a positive thing? Well, the common defense of HFT is that these firms who run these algorithms are providing liquidity, a measure of the degree to which a stock can be bought and sold without affecting the price. Generally, the more liquid a stock is the easier it can be traded without causing huge swings in the price. As long as the liquidity is real and those who provide it are committed to it, greater liquidity can be very beneficial to investors. Specifically, it can lead to lower bid-ask spreads (which can lead to lower costs of trading) and a greater ability to move into and out of cash when investors so desire.

However, we believe that the problems created by HFT are twofold:

1. Increased volatility and the risk of extreme moves in the markets

2. Increased trading costs through predatory activities

The market roller coaster

First off, all of the evidence we find suggests that HFT creates unusual volatility in the markets. Let’s go back to the so called “Flash Crash” on May 6th, 2010. The Dow Jones dropped 600 points in a matter of minutes, shares of Accenture (ACN) dropped from over $40 to a penny, and shares of Apple (APPL) rose to over $100,000 each. Even though the exchanges eventually cancelled these outlier trades, how is it possible that share prices can fluctuate so dramatically? The initial reaction to this dramatic move in the price of market indexes was the “fat finger” theory. This is the idea that some incompetent trader who meant to sell one thousand shares inadvertently added three extra zeroes and sold one million shares. However, we believe that such explanations are created in an attempt to obscure the fact that the markets are broken.

Actually, these are not our words but basically what Larry Leibowitz, the COO of NYSE Euronext (owner of the New York Stock Exchange), said during his testimony in front of a House Financial Services Subcommittee five days after the Flash Crash. Specifically, this is what he said about the impact of technology on the functioning of our stock markets:

The May 6 market drop certainly should inform the SEC’s [Security and Exchange Commission’s] current examination of the changes in the markets, and in particular how certain recent advances in technology may have fostered trading practices that negatively impact the entire market…As regulators seek to determine whether regulatory action is necessary to address the shifts in market structure resulting from technological change, the events of May 6 make it clear that the regulators also need to consider steps to avoid the types of extreme volatility our markets experienced that day.

This indictment of the recent technological revolution in trading came from a man whose company thrives on market volatility since fees go up as volume increases. Additionally, NYSE Euronext jus opened a huge new $500 million data center in order to take advantage of co-location (where exchanges like NYSE allow traders to plug directly into their servers and increase their trading speed dramatically) revenue that is derived solely from firms who want quicker speeds for their electronic trading. So, despite his vested interest in the increased proliferation of HFT, Mr. Leibowitz is clearly concerned that the practice is a threat to the integrity of the U.S. stock markets.

Liquidity dries up

The problem arises when other market participants depend on liquidity that will only be present when the market is going up or trading sideways. Unfortunately, as we believe the Flash Crash proved, when the market declines rapidly the liquidity dries up as the algorithms shut down to avoid catching a falling knife. Essentially, our concern is that when the market plunges the HFT algorithms are programmed to stop trading so that the firms are not caught holding assets that are falling in value. But, this just exacerbates the drop in the market as there are subsequently fewer buyers remaining. A true liquidity provider would remain in the market in order to bid on assets even if they are declining in price and make an active market (one with both buyers and sellers) in stocks. But, if the HFTs flee the market at the first hint of weakness, the market can stop functioning. When this happens, stocks such as Accenture, which usually trade close to 4 million shares a day but saw volume spike to 10.3 million shares on the Flash Crash day, can fall from over $40 to $.01. Unfortunately, this type of volatility can make stocks stray far away from their intrinsic values and cause retail investors to leave the market because they are unable to stomach the price swings.

I have tried to approach this rather technical and rather difficult white-collar crime from different perspectives in order to illuminate this secondary indictment of the Wall Street banks for crimes against the world – secondary, in the sense, that my main indictment will be focused upon the Housing Bubble Deception and the Great Robbery of the American people that followed .

I wonder, now, having looked at all of this, whether the HFT was the PPT’s initiative to surreptitiously make the markets move up, especially during times of stress. This is a perfect tool to manipulate the markets higher. HFT makes up as much as 70% of daily trading volume. It is easy to use HFT to manipulate Bid/Ask positions , to provide liquidity when liquidity is needed.

Why is no one trying to stop this practice? It makes up billions of profits on Wall Street each year. Bush was friend of Wall Street; so was Clinton; so was Bush Senior. Obama’s largest campaign contributor was Goldman Sachs. Who is going to attack the Golden Calf when the Golden Calf is financing one’s own political dreams? Wall Street owns Washington. Our democracy has been lost.

What If the Stock Market is not a Fair Market?

If the stock market is not a fair market – and does favor those with powerful friends and with inequitable technology and inequitable distribution of information – which, I believe, is the legal definition of the illegal activity called ‘insider trading’ – and favors those with more money than the rest of us – may favor those who gave large campaign contributions to some of those who are now sitting on the Plunge Protection Team – isn’t this a flaw in the system that needs to be corrected? I think it needs to be corrected.

In theory, stock prices are supposed to reflect the real value of a company. As the value of the company grows, the stock price grows with it. Yes, there will be imbalances as investors bid up a stock more than it is worth – the emotional factor coming in to play. But what if the US government is keeping its finger on the scale so that true value of a company vis-a-vis. a company’s stock cannot be determined? Is that an issue for an investor? I think that it is.

What if investment banks are using advanced computer technology to steal billions from American and global investors through shaving bid/ask quotes to pocket millions of fractions of profits with each trade? Is that an issue for an investor? I think that it is.

Back To the Future, Sort Of: Is America in 2011 Where Japan Was in 1996?

Digressions Are Inevitable in Cyclical (Poetic) Story-Telling – Back to 2001.

So, American stock markets began to trade sideways beginning in 2001, thus eliminating the primary secondary income for Americans to keep up with rising prices as the Day-Cycle expansion began to peak – we will remember that salaries had been trading sideways for quite some time already (we will provide charts that demonstrate this). Consumers needed another secondary stream of income to be able to continue to feed the expansion – to keep the full glass overflowing.

Greenspan’s ‘housing bubble’ filled this role.

In March 2000, the Nasdaq Stock Exchange crashed. The NDX Index was trading at a high of 4816, the huge rally being fueled by the Dot Com stock enthusiasm, which vastly overvalued start-up internet companies and generated a frenzy among investors to buy stock in 'the next Microsoft' before it was too late– this was the first bubble of the Greenspan/Bernanke era.

We have said before that economic growth is symbolized by the empty glass being filled up. Deflation is symbolized by the full glass being emptied out. What exactly – what substance -- is being filled up and emptied out? Debt, of course. Debt; water; prosperity.

In 1983, America began to re-fill its empty glass. From 1983 to 2001, the empty glass was filled, the country assumed more and more debt, gained more and more material power. In 2001, the expansion concluded. The glass was full -- the growth phase of the Business Cycle was over.

A bubble in financial markets is a sign that the Economic Glass, already filled, is being overfilled. The water ‘bubbles’ over the glass and spills water everywhere, creating a flood, -- the flood being a metaphor, a bibilical metaphor, for social chaos, monetary panic, and deconstruction of the plant, the Tree of Life ( or civilization civilization) that the Day-Cycle of economic growth has built.

Day-Cycles 'build' the dream of civilization and human achievement. Night-Cycles 'destroy' this dream, which, to the increasingly negative perspective, has become corrupt, has failed to measure up to the dream -- Nature gains power in the Night-Cycle and Man loses his power to control events. Massive over-watering of the economic garden is a sign of Man's attempts to keep control oveer Nature, Man’s frightened attempt to keep Woman in control, using techniques that worked during the building- or Day-Cycle – inflating the world through lower interest rates -- but which do not work during the deconstruction-, or Night-, phase.

The Economic Garden – this is the Garden of Eden during the growth season and is the season lost but remembered when the growth season ends -- during the Winter Season, does not need to be overlooded by man's feeble attempts to preserve what he is afraid to lose. A garden, after a season of production, followed by significant flooding, needs to be dried out (de-leveraged) in order to prepare it for an eventual new planting season

Sadly, this fearful, chronic 'overwatering' is still occurring, a decade later, as Ben Bernanke is still convinced, apparently, that the only 'fix' for an over-watered garden is more and more water -- more or more debt.

This bubble-creation policy of Dr. Bernanke has been characterized by critics as 'extend and pretend' -- suggesting that Bernnanke's policy is based on a stalling tactic in hopes that economic growth will somehow magiclaly appear to relieve the global economy which seems to be drowning in its staggering debt burden. Ben apprently thinks he can save this drowning man by forcing him to drink more water, forcing him to tke on more debt.

What if growth cannot happen until the full glass has been emptied out? What if emptying the glass is the exact, ‘natural’ monetary policy needed at this stage of our cycle? As I have written, I believe we should have begun raising interest rates slowly and steadily in 2001, and should still be raising rates slowly. Lowering interest rates fills the Economic Glass, but only when the glass is empty. Lowering interest rates when the glass is full floods the world with unwanted and unneeded (destructive, in fact) liquidity.

Raising rates will empty out the glass. We need to raise rates, confront and destroy our debts – taking our real medicine -- and dry out the garden to begin preparing it for the next growth season, scheduled to begin in 2019.

However, as Japan has so vividly shown us -- growth will not return on time if we do not understand that growth and the empty glass must go together – understand this, and act on this understanding.

Bernanke’s ‘extend and pretend’ policy has been described by some critics as Japan 2.0. Japan tried to hide its bad bank loans also -- also after experiencing a disastrous real estate bubble -- and tried to borrow its way out of debt. This did not lead to a recovery, but to a continuing deflationary economic environment that has lasted for more than two decades – unable to grow out of stagnation, amassing more and more debt in an attempt to stabilize asset prices, Japan's decline continues today. Is America, by following Japan's game plan, creating a future for itself of similar sorrows?

‘We are not Japan!’ This cry is one often heard from defenders of Bernanke’s policies. Yes: America is not Japan – this is an obvious truth. But two men, one Japanese, and one American, one 5’6” 165 pounds, 50 years old, the other 6’5” 265 pounds, 30 years old, both suffering from pancreatic cancer, are probably going to show common symptoms as their disease takes over their lives. Furthermore, if the medication used to fight the disease is the same, then patterns of decline might be similar, might they not?

Japan and America both have the same disease: ‘toxic’ debt being hidden from public view to protect their banking system – the ‘extend and pretend’ disease. If the disease is the same, and the medication used to fight the disease is the same, which they seem to be, then the symptoms, and the results stages of the disease may very likely also be similar.

Japan has been refilling its full glass for nearly 20 years – and it has not escaped it’s deflaltionary, no-growth trap. Japan will not be able to grow its economy until it finally empties the glass – and begins to make a real effort to destroy its bad debts, no matter how many banks and how much Old Money overlords go down the drain in the process.

In March 2000, the Nasdaq Stock Exchange crashed. The NDX Index was trading at a high of 4816. The NDX, today is trading at 2400, still 50% lower than its top in 2000. In fact, the Nikkei Index and the US NDX Index charts look very much alike, although staggered in time. The NDX, in early 2001, seems to be right where the Nikkei was in 1996.

The Nikkei Index crashed in 1989, dropping from a high of 39,000 to its current price, 10,500. That's a whopping loss of shareholder value.

The resemblance between charts of NDX, the Nasdaq 100 Index, which topped in 2000, and the Nikkei Index, which topped in 1989, is quite striking.

The initial decline of the Nikkei Index, from its top to its first bottom, was 25,000 points, or 64%. The intial decline of the NDX Index in 2000 was 3480 points or 81%. The Nikkei had gained 300% is the five years leading up to 1989. The NDX had gained a remarkable 700% in the five years leading up to its crash in 2000. Both charts describe graphically what a 'bubble' looks like, Mister Greenspan, in case you still don't know how to recognize a bubble.

For both indexes, these first bottoms proved to be a reversal trading point, and generated what appeared to be, for a time at least, the major bottom in the crash.

This is still appears true for the NDX, which has recouped 1600 points of it’s initial 3500 point loss, a recovery of some 45.7143%.

The Nikkei rallied back from its 1992 low of 18,800, gaining 4800 points in the process, a recovery of, believe it or not, 45.7142857%. Both indexes successfully tested these new lows, and then put in new highs. This process usually indicates a successful bottoming and usually ‘predicts’ further advances.

Let's look at charts of both indexes, and look at similarities. The NDX chart runs from 1995 to 2011 The Nikkei chart runs from 1986 to 2011.

The NDX has put in a trading bottom, has ralied off its lows, tested those lows successfully in 2009, and is now taking out resistance, making a new high. This chart looks quite positive, in fact.

The Nikkei Index did almost exactly two decades ago what the NDX is doing today. But then it could not sustain its rally.

The Nikkei, after successfully building a trading bottom in 1992, and tessting that bottom in 1996, breaking an old high in 1996, subsequently broke through the old low (14,296) in 1998, failed to break through resistance to make a new high in 2000 (20,328), and then collapsed, all the way down to 7000 in 2009. This represents a loss of 82% from 1989 to 2009.

Is this a picture of where the NDX is heading?

If we assume, for the sake of mental exercise, that the NDX will mirror the fall of the Nikkei, this would suggest a decline in the NDX to roughly 770 from its current 2350 level, a decline of another 33%. But why would we assume this ‘inevitable’ mirror relationship of the Nikkei and the NDX? America is not Japan afterall.

Yes. America is not Japan. I keep forgetting this.

Japan did not have illiegal front-running through high-speed computer trading that can predispose markets in favored directions. I keep forgetting this also.

Perhaps all the rules of understanding markets can be thrown out the window now that we have Goldman Sachs and other Walls Street bankers watching out for us so well by bending the rules a bit to keep financial markets assets expanding. Aren’t we all on the same side, on the side of more wealth, more power, and more conquest of limitations for America?

Well, the thesis of this book is that Nature will eventually level every system designed for perpetual expansion. There is a tsunami out there with every one of our names on it. it comes to us to empty us out, when we need emptying. Ours is coming, and will continue to raise its head up, until its work is done and the Night-Cycle has run its course.

Reading the Main Indictment

What is Obama Waiting For?

Obama Claimed He Was the One to Reform America – But He Has Become, Instead, the Protector of Wall Street Corruption.

One thing government can and must do, however, is to raise taxes on the very rich Americans to provide social support systems for those who have been impoverished by errors, sins, and misdeeds committed mostly by America’s rich, those ‘masters of the universe’.

As I have suggested, I believe in Ecclesiaste’s wisdom: to everything there is a season. Let the rich generate personal wealth during the Day; and let the rich give back this wealth during the Night. It is a mechanism we can follow. Competition by Day; and Cooperation by Night. Lower taxes during the Day-Cycle; higher taxes during the Night-Cycle.

The danger the richest class faces, if they resist such collective sharing of the wealth during the Night-Cycle, is that they might lose everything in a social revolution, which is always a possibility during a deflationary Night-Cycle. History shows many examples of inflexible arrogant rich classes being stripped of their wealth and driven in to exile during Night-Cycles, when the moral imperative changes sides, joins forces with the weak.

One wonders why Alan Greenspan has not joined the monastery by now after his ‘free market’ doctrine and policy has helped to turn the American and global financial gargantua into a paper junkyard; and has turned the financial promises of America’s once-proud corporations into a kaleidoscope of shrinking visions, corporate corruption, and a rattled pyramid of junk-bonds.

The ‘I made a mistake’ statement – i.e., ‘I made an error in judgment’ – is not enough, Alan. Admit that you are a kind of Ahab! Admit that you unintentionally torpedoed the Pequod, the boat in which all Americans are riding! Admit that you sank the American Ship of State because you were trying to destroy Death, trying to defeat the Shadow; you were trying to exterminate the Great White Whale of philosophical and financial and physical mortality!

Tell us that your ambition was great, even as your judgment was flawed, as your management skill was … much less than advertised! A good education, and mediocre understanding, almost always lead to tragic results.

“I continue to believe the U.S. economy is healthy.  We have had a significant housing correction in the U.S. You can’t have a correction like that without causing some dislocations. It’s too early to tell whether it’s bottomed. I believe it has…….shouldn’t be a surprise to anyone that there’s some fallout in the subprime mortgage market … but it’s largely contained.”

~Henry Paulson  March 2007

There are two fundamental reforms we need: adequate capital and to get far higher enforcement of fraud statutes – existing ones – I’m not even talking about new ones. Things were being done which were certainly illegal and clearly criminal in certain cases. If you cannot trust your counterparties, it [capital markets] won’t work. And indeed we saw that it didn’t.

- Alan Greenspan

The brash way that this scam (High-Frequence-Trading) is carried off is beyond belief. The deep-pocket bank/brokerages actually pay the NYSE and the NASDAQ to "colocate" their behemoth computers ON THE FLOOR OF THE EXCHANGES so they can shave off critical milliseconds after they've gotten a first-peak at incoming trades. It's like parking the company forklift in front of the local bank vault to ease the transfer of purloined cash.

Wall Street High Technology Highway Robbery, Mike Whitney

What is the difference between a Banker and a Mafioso?

The Banker is the Mafioso at the end of his career. The

Mafioso is the Banker at the beginning of his career.

Colloquial Proverb

CHAPTER FOUR.

APOLLO AND DIONYSUS. THE COWBOY AND THE INDIAN.

"Practical men who believe themselves to be quite immune from intellectual influences are usually the slaves of some defunct economist."

John Maynard Keynes

The German philosopher Friedrich Nietzsche re-discovered in Greek mythology the ancient classical ideas of the divine manifestations of Day and Night. In his book, The Birth of Tragedy, Nietzsche draws a clear distinction between the Day brother, Apollo, and his shadow, the Night brother, Dionysus.

In The Consequences of Ideas, R.C. Sproul writes:

‘While working on his doctoral dissertation, Nietzsche studied classical Greek art and philosophy. He noted the ancient conflict seen in the images of Apollo and Dionysus. In these images, Nietzsche discovered the visceral antagonism within himself, and antithesis between the mind and the will. In Apollo, the rational and the orderly are incarnated. Apollo represents the Greek ideal of order and harmony. Apollonian art displays perfect symmetry and proportionality. Its sculpture displays no warts. The figure of Dionysus, on the other hand, represents the element of the chaotic. Dionysus was worshiped in the ancient Bacchanalia, named after Bacchus, god of the grape or of wine. In the ancient ritual, one attains mystical release from the inhibition of reason by entering into a drunken, orgiastic stupor. In this Dionysian frenzy, a person loses his individual identity as he merges into mystical union with a transcendent ‘one’ or ‘oversoul’.

For Nietzsche, the Apollonian idea is realized in Hegel’s intellectualism, the Dionysian mood in Arthur Schopenhauer’s voluntarism. The Dionysian model offers entrance into a dynamic stream of life-force marked by passion and expressed in music that creates a feeling of abandon.

Historical movements representing the Day and Night cycles would later be called Rationalism and Romanticism. Of course, the advent of the Wagnerian Dionysus imperative was an intimation of the rise of National Socialism in Germany. We will note that the manifestation of Dionysus will always be associated with destruction.

George S. Williamson, in his book The Longing for Myth in Germany, would write:

The stated purpose of The Birth of Tragedy was to set forth the ‘secret doctrines’ of Greek aesthetics. Greek culture, Nietzsche argued, originated from the interaction of two antagonistic forces, represented by the deities Apollo and Dionysus. Apollo was the power that created the images of dreams and fantasy. The beautiful forms of Greek sculpture, the coherence of the individual psyche, even the ordered veneer of the phenomenal world, were all products of Apollonian illusion. Dionysus, by contrast, was the formless abyss of suffering that coursed underneath these tranquil surfaces. The Dionysian reached its perfect expression in music, an art form without images. According to Nietzsche’s scheme, the cultural flowering of Greece depended on the continual tension between Apollo and Dionysus, just as procreation depended on a dualism of the sexes, with ‘continuous strife and only periodic reconciliation.’

It was the Apollonian impulse that had given rise to the bright Homeric deities, whose serene images had led Winckelmann and Schiller to praise the blessedness and naivete of Greek life. But, now, Nietzsche contended, ‘the Olympic magic mountain opens up for us and shows us its roots.’ For the Apollonian images did not reflect Greek happiness but, rather, compensated for a darkly pessimistic [and recognizably Schopenhauerian] worldview. From time to time this world of appearances would fall away, as the hard-won individuality of the Greeks collapsed in a torrent of Dionysian ecstasy. On such occasions social distinctions were overturned, ‘the slave became a free man’, and neighbor was reconciled with neighbor in an ecstatic celebration of unity. ‘Man is no longer an artist, he has become a work of art. The aesthetic power of all nature, to the highest satisfaction of the primordial unity, reveals itself here in the tremblings of intoxication.’

Apollo was thoughtful; Dionysus was willful. Apollo was dreamy; Dionysus was worldly. Apollo was saintly and artistic. Dionysus was devilish and materialistic. Apollo wrote about life, described it in sculpture or painting. Dionysus lived life, in all its brightness and darkness. Apollo’s expression touches on perfection. Dionysus is the birth of the tragic. Apollo is a ‘detached’ man of reflection, governed by intellect. Dionysus is an ‘attached’, passionate man of action, governed by body and by the life-instinct. Apollo expressed the subjective; Dionysus expressed the objective. Apollo was concerned with God’s laws; Dionysus was more concerned with man’s laws.

H.L.Mencken wrote in The Philosophy of Friedrich Nietzsche:

In ancient Greece, he pointed out at the start, Apollo was the god of art - of life as it was recorded and interpreted - and Bacchus Dionysus was the god of life itself - of eating, drinking and making merry, of dancing and roistering, of everything that made men acutely conscious of the vitality and will within them. The difference between the things they represented has been well set forth in certain homely verses addressed by Rudyard Kipling to Admiral Robley D. Evans, U. S. N.:

Zogbaum draws with a pencil

And I do things with a pen,

But you sit up in a conning tower,

Bossing eight hundred men.

To him that hath shall be given

And that's why these books are sent

To the man who has lived more stories

Than Zogbaum or I could invent.

Here we have the plain distinction: Zogbaum and Kipling are apollonic, while Evans is dionysian. Epic poetry, sculpture, painting and story-telling are apollonic: they represent, not life itself, but some one man's visualized idea of life. But dancing, great deeds and, in some cases, music, are dionysian: they are part and parcel of life as some actual human being, or collection of human beings, is living it.

Nietzsche maintained that Greek art was at first apollonic, but that eventually there appeared a dionysian influence - the fruit, perhaps, of contact with primitive, barbarous peoples. Ever afterward there was constant conflict between them and this conflict was the essence of Greek tragedy. As Sarcey tells us, a play, to hold our attention, must depict some sort of battle, between man and man or idea and idea. In the melodrama of today the battle is between hero and villain; in the ancient Greek tragedy it was between Apollo and Dionysus, between the life contemplative and the life strenuous, between law and outlaw, between the devil and the seraphim.

Nietzsche, as we shall see, afterward applied this distinction in morals and life as well as in art. He called himself a dionysian and the crowning volume of his system of philosophy, which he had barely started when insanity overtook him, was to have been called "Dionysus."

I write that Nietzsche re-discovered the meaning of Apollo and Dionysus. The metaphysical meaning of Apollo and Dionysus dates back to the most ancient philosophies of Assyria and Babylon, and began as a concept connected to the Moon. Moon-worship developed before Sun-worship. Moon cycles were easy to observe from the Earth, as the Moon moved through a very distinct 28-day cycle divisible in to 4 equal segments of 7 days each. Seven was a sacred number of most early religions because of the Moon’s easy divisibility. The creation of the Week as a division of time came from the observation of the Moon cycle.

Also moon-worship developed in the southern climates where, quite literally, the Sun was experienced as an oppressive force, the Moon as a soothing sanctuary from the deadly heat of the day.

The North worshipped the Sun because the Sun saves the North from the killing cold of Winter (Night daily embodiment of its larger cyclic brother Winter). The South worships the Moon because the Moon saves the South from the killing heat of Summer (Day is, of course, the small-cycle counterpart of Summer).

There is this built-in duality of Earth: when it is Day in the East it is Night in the West; when it is Summer in the North, it is Winter in the South. This, in part, explains the conflict built-in to Earth cycles. Each of the four quarters of the Earth is experiencing life at a different stage of the cycle and through a different perspective of reality. Each perspective, in this sense, is ‘true’ – yet, also, at the same time, adamantly contradictory.

When civilizations developed more advanced sciences in astrology/astronomy (and when civilization moved more northward), Sun-Worship supplanted Moon-Worship; but Sun-Worship presented a similar time-structure as Moon-Worship, this time over the term of One Year as the Moon did over the term of One Month.

The Time Structure of the single Day also evinced a similar structure: two forces in opposition; two forces in balance.

Three time elements were seen to have a common archetypal structure.

The trinitary Time divisions into four ‘seasons’ were:

Dawn Noon Dusk Midnight

Waxing Half Moon Full Moon Waning Half Moon New Moon

Spring Equinox Summer Solstice Autumn Equinox Winter Solstice

Ernest Busenbark writes in his (unfortunately-titled 1949 book) Symbols, Sex and the Stars:

In addition to the myths derived from the ancient belief that the moon was a Generator of Life, Goddess of Motherhood and Regulator of Fate, the moon was the subject of another type of myth, in which her monthly changes were thought to be the result of a conflict between deities. It was a contest between the God of Light, or the Overworld, and the God of Darkness, or the Underworld, in which each contestant triumphed, in turn, over the other. With the growth of sun worship, the myths, which were based upon this theme, began to partake of a solar character.

The underlying motifs of the Light and Darkness myths were growth and decay, life and death, day and night, summer and winter, which seemed to constitute systems of pairs of opposites by which all life and activity in the universe was maintained in a state of balance by the opposition of natural forces.

The Mother Goddess cults generally deteriorated gradually into sex worship, and finally passed from the world’s stage, leaving only a mass of myths and superstitions; but the Light-Darkness myths contained the germ from which developed the great ‘ethic’ religions which now, for upwards of 2500 years, have played a great part in molding civilization….

Light was not, in itself, a complete entity: it required the Darkness to make it whole, just as the Male required the Female. As a positive current of electricity is without force unless accompanied by a negative current, so, in early times, the God or Power of Light was considered incomplete without the power of Darkness to give it contrast, opposition, force, and completeness.

Opposition or apparent conflict between the ascending and descending phases of the Moon provided the underlying motif for the story of the Two Brothers, called the ‘parted’, which, in various forms, is found in mythology all over the world. In the zodiac, they are thought to be represented as Gemini, the Twins. In China, they appear as Oph and Shichim; in India they are Cristna and Balarama; in Egypt, Set and Horus. Some students of comparative religion see similar motifs in the conflicts between Abel and Cain, and Jacob and Essau.

The descending half of the Moon was often depicted as the Dark One, the Deceiver. In another type of myth, the descending Moon becomes the Manifester, the Precursor or the Sacrificial Type; and the ascending half is portrayed as the Bringer of Light, the Savior or Redeemer.

The Full Moon is, of course, the Virgin Mother, the Queen of Heaven.

In Egyptian mythology, the ascending phase of the Moon, as the reflector of the Sun’s Light is represented by the God Horus, who is portrayed as the Eye of the Sun. The dark phase is caused by Set, the demon of Darkness, who steals or wounds the Eye of Horus. On ancient monuments, Set is shown with the head of a jackal, which fact proclaims him as the Night Prowler and the Thief of Light.

Graphically, this dual representation of Light Brother/Dark Brother, overlaid on our Time diagrams, appears below. Apollo, of course, in this context, represents the Bringer of Light; Dionysus represents the bringer of Darkness, whose power grows from nothing at Noon or the Summer Solstice, when there is no shadow, to all-powerful at Midnight or the Winter Solstice – at which point Light is weakest, almost non-existent. Of course, the Winter Solstice represents the birth of light, the birth of Christ, the re-birth of the Solar Hero, the re-birth of Apollo.

This discussion is complicated by the fact that the perception from the material universe is exactly reversed from the perception from the anti-material universe (the spiritual universe). In the material universe, white (Day) is good and black (Night) is bad. In the anti-material universe, Day is bad – the arena or ring of conflict, where sins are committed, and where karma is accrued-- and Night is good, a place of rest and reflection – also a realm of judgment for those who have sinned during the Day. At Night the soul approaches his God. Day is the time when the material world expands – riches, powers, temptations are given to the soul. Night is the time when the spiritual world expands. But in the anti-matter world, expanding materialism is the darkness, the Night, not the Light, the Day.

Both perceptions are illusions, as I have written. Illusions being part-truths. But both illusions are very potent; and both illusions power the world into action and re-action, back into Day and back into Night.

The material world relates to the anti-material world as the photograph relates to the photographic negative. Light relates to darkness in this same manner. Without darkness there is no light. Without the photographic negative, there is no photograph.

I realize I have awkwardly complicated these ideas, ideas which were somewhat complex even before I added the mirror reflection.

For my own purposes, the myth of Apollo and Dionysus seems too classical and too European. To more clearly present this structure in the American context I believe the ‘updated’ concept of Cowboy and Indian might be more useful. I will also use the expressions Day-Force and Night-Force, as well as the expressions Culture and Counter-Culture. I have a slightly different take on the essences of these two ‘brother’ natures, in fact.

Who is the Cowboy? The Cowboy is the White Man who is attracted to his opposite, the Dark Woman (the Earth). We will see that the Indian is the Dark Man who is attracted to his opposite, the White Woman (the Moon). The White Man is the Spirit Force materializing, falling to Earth. The Dark Man is the Matter Force spiritualizing, rising into Heaven. As the Spirit Force falls, it becomes darker. As the Matter Force rises, it becomes lighter. The Hebrew diagram for the Star of David incorporates some of these same ideas.

I have written that the White Man (the ‘winner’, the ‘successful’ force) will become, in time, the Dark Man (the ‘loser’, the ‘defeated’ force) – and, when the White Man becomes Dark (‘Dark with sin’) he will be rejected by the Dark Woman, the Earth – this is a basic law of physics, opposites attract; like forces repel. And this White Man-become-Dark Man will then be saved by the White Woman, the Moon, the Virgin Mary in Christian terminology. The Dark Man becomes the Messiah, the Soul, that is given birth by the Wisdom of the Night, the Virgin Moon, shining in the Night Sea.

The Cowboy is the force of the Day, the Physical Sun, the force of Man’s Law that supports city-building and civilization. The Cowboy is the fertility force, the Sun that magnetically inspires the growth of crops, the building of wealth, procreation, empire, material expansion.

The Indian is the force of the Night, the Metaphysical Sun, the force of God’s Law that destroys city-building and civilization through the force of inactivity, the force of the Dream-Time. The Cowboy is Human nature; the Indian is the human-in-Nature.

The Cowboy is the Hero, who seeks to defend the innocent Community from the forces of Evil. The Indian is an Anti-Hero, who seeks to defend the innocent and the poor from the evil forces of the corrupt overlord community.

How all this hidden symbolic structure relates to history has been pursued and presented by some historians, Oswald Spengler, Gambattisto Vico, and, in a different sense, Marsilio Ficino have all written morphological studies of history. These approaches have been met with admiration at certain cycles of history, and with ridicule at others. Clearly these historians are Indian types, whose visions are generated through the symbolic mind, not the Cowboy rational mind. Science comprehends the straight line of causality but not the curved line of cyclicality, which it considers superstition.

Freud was a Cowboy (read ‘practical’); Jung was an Indian (read ‘other-worldly’). Confucius was Cowboy (read ‘willful’); Lao-Tse was an Indian (read ‘selfless’). Aristotle was a Cowboy (read ‘a physician of the Real World’); Plato was an Indian (read ‘a metaphysician of the Ideal World’).

Negentropy (an unfortunate name for the increasing complexity of organization of information) is a Day-Force; Entropy (increasing complexity of disorganization of information) is a Night-Force – i.e., the physical world runs down. The Lone Ranger was a Cowboy, obviously; and Tonto was an Indian. Tom Sawyer was a Cowboy; Huckleberry Finn was an Indian. (Huckleberry Finn was a Cowboy; and Jim the Slave was an Indian. This shows how complex this structure is, and how roles shift depending upon the attendant elements participating in the atom.)

A contemporary Jungian scholar (it may have been James Hillman or Edward Edinger, both of whom I admire) described the difference between Freud and Jung as being (and I am paraphrasing) that Freud sees the world through the eyes of a youth approaching the world of men seeking life, success, and well-adjusted conformity to man’s social structure; whereas Jung sees the world through the eyes of an adult approaching old age and death, seeking knowledge of the future life (Eternal Time) and a well-adjusted conformity to God’s more esoteric spiritual structure.

The diagram (above) of the Apollo/Dionysus polarity is not very exact. In a more real sense, the Light rules from Dawn to Dusk (the Overworld); the Darkness rules from Dusk to Dawn (the Underworld). But the diagram above does show an aspect of the two brothers’ relationship: Light is weakest at Midnight (Winter Solstice) – i.e., the days are shortest -- but begins gaining strength at this point until Noon (Summer Solstice), when days are longest, nights are shortest. At Summer Solstice, Light begins to lose its battle with Darkness – nights begin to get longer, days shorter. Darkness is weakest at Noon (Summer Solstice), after which Darkness begins to win the battle with Light.

Then the children of Israel did evil in the sight of the Lord, and

served the Baals and the Astoreths, the gods of Syria, the gods

of Sidon, the gods of Moloch… So the anger of the Lord was hot

against Israel; and he sold them into the hands of the Phillistines

and into the hands of the people of Ammon. From that year they

harassed and oppressed the children of Israel for eighteen years…

Book of Judges,: 10, 11

CHAPTER FOUR.

DAYS AND NIGHTS IN AMERICAN HISTORY.

(If There Is Precision Inherent in Matter, Is There Not Also an Implied Precision in Matter’s Behavior?)

‘All things from eternity are of like-forms and come round in a circle.’

Marcus Aurelius

Ronald Reagan was a Cowboy; Jimmy Carter was an Indian. Barack Obama is an Indian.

The illusion is that the Cowboy and Indian, the Culture and the Counter-Culture, are two separate forces, two separate natures and personalities. In fact, these two forces are a unity. The Cowboy is the youth approaching the world of men seeking life, success, and well-adjusted conformity to man’s social structure; the Indian is that same force at a different point in the Time Cycle, as an adult approaching old age and death, seeking knowledge of the future life (Eternal Time) while seeking a well-adjusted conformity to God’s more esoteric spiritual or anti-material structure.

The Cowboy carries the world out of anti-matter (the Dream Time, Eternal Time) in to the world of matter (Time); the Indian carries the world out of matter back in to the black hole of anti-matter. The ‘black hole’ of depression is a kind of womb in which we germinate, dream, in and from which we find the ‘mask’ or vision our re-birth.

The Cowboy represents the Life of the Body, the life of Form, Formality, Reason, Law, Civilization, Scientific Intellect The Indian represents the Life of the Soul, the Life of Mind (Spiritual Intellect), Informality, Dreams, Creativity, Culture, Art, Community. Every culture, nation, individual needs to develop both sides of this ‘personality’, the Day Personality and the Night Personality.

The Cowboy builds the physical world and provides security and rules of behavior in which the society can develop. The Cowboy brings law to the world, order, civilization. The Cowboy ‘engineers’ the world, building structures in the external world, houses, cities, nations, specializing in technology, expanding its influence on a truly global scale. The Indians (the Indians are Asiatic in origin) are more passive in the physical world, view Nature as a divinity, rather than a resource to be appropriated or ‘developed’ (which is an interesting word, as though Nature were not developed. The ‘developer’ is clearly one of the more interesting euphemisms that materialism has imagined.) The Indians build structures, understandings, in the internal world, develop relationships with gods, spirits and ancestors who live now in the dream world.

Cowboys are Solar-Worshippers. Indians are Lunar-Worshippers.

Cowboys abhors the Indian, think the Indian is insane. (The Culture generally feels the same for the Counter-Culture.) The Indian feels the Cowboy is crude and materialistic, soulless. Donald Trump is a Cowboy, the conqueror of the world. Bill Gates is a Cowboy, a scientist conquering the world. Napoleon and Hitler were Cowboys. Bach, Rembrandt, Melville, and James Joyce were Indians. My thesis is that we need both. America, speaking generally, has given more credence to the Entrepreneur, the Cowboy, over the last thirty years. Sadly, I think most Americans would rather have their son grow up to be Donald Trump than Johannes Bach. I think this is explained by our overemphasis on the practical Daylight side of life – devotion to the so-called ‘real world’ -- and the religion of Materialism that has dominated the world since the Scientific world-view dethroned the Religious world-view in the West, especially over the last 200 years or so.

That is not to say that the Donald Trumps of the world have no value. Donald Trump plays his role, as do all of the builders of the physical world. It’s just that for every million Donald Trumps the world creates, the world creates only one Johannes Bach.

America, speaking generally, gave more credence to the Artist, the Musician, the Poet, from 1965-1982 however. At least the youth of America did, which is the machine that drives Western culture.

I believe America’s future will be great in terms of cultural developments. I will discuss, in a later chapter, the American civilization vis-à-vis the Roman civilization. Intellectuals, especially European intellectuals, enjoy despising American culture by equating it to ancient Rome. Ancient Romans were skilled as warriors and engineers, as city-builders, and empire-makers, as the ‘Policemen of the World’. The Day-Force, the Cowboys, in other words. In this view, Greece was the culture of the world and Rome was the body, the uncultured force of will. In the same way, today, Europe is the culture of the world, the Greece of today. Rome was a nation of materialistic bullies. Many, today, view America in this same way.

Hinduism speaks of a Father-Mother principle, the Unity split into two, before the duality splits into adversarial manifestation.

Rome was a Father-Mother principle, manifesting, first, as the Father, the militarist, the force of earthly order, business, pragmatism. Later, after corrupt ancient Rome was overrun by Germanic barbarians, Rome manifested as the Mother, giving birth -- after a long-period of dormancy (the Dark Ages) -- to Renaissance European city states, which later developed in to the independent countries, cultures and languages of Europe and England.

To judge Rome fairly, one must view Roman history in both parts: the Day world of the powerful Patriarch, with his powerful army, his business acumen, who dominated the physical universe – the civilization stage -- and the Night world of the powerful Matriarch who gave birth to Modern Europe – the culture stage. Julius Caesar transformed in to Jesus Christ, at Midnight; and, then, at Dawn, in to Michaelangelo, Leonardo, Dante, Shakespeare, Bach, Goethe…and all of the great artists and thinkers that grew up from Rome’s rich animated diffuse soil.

America will have a similar period of cultural greatness. But America will also need to go through a Dark Age to get to the stage of cultural rebirth. Economic depressions (Night-Cycles) are Dark Ages in miniature form (36-year cycles in toto). Historical Dark-Ages are Winter-Cycles, enduring for hundreds of years.

If the life on Earth does not end in 2012, then we can expect American history to mirror roughly Rome’s own history, with an eventual collapse of democratic government (the Republic Stage), an advent of government by an autocratic family or families (the Empire Stage, even more dramatically executed than today, with even greater failures), and a final collapse into corruption and fall to a barbarian invading culture (or, perhaps, a great civil war through which the powers of East-Coast American cities are overthrown.).

According to this scenario, current American regions (New England, Northeast Corridor, Atlantic Coast, Deep South, Midwest, Rocky Mountains, Southwest, Pacific Northwest, and California) will, over time, and through a Dark Age stage of isolation, germination, and spiritual regeneration, develop independent national cultures with languages and dialects rooted in English, much as Europe developed cultures and languages from the root of Rome’s Latin world-language.

If the lens I’m using is accurate, a messiah figure is also scheduled to appear in America during this next century. A messiah figure who is both lion and lamb, and may manifest the lion aspect of his character 2,000 years after having manifested the lamb side of his nature. We will look at this more closely later.

The ‘Culture’ comes from the inner world and creates the outer world, the Civilization; and the ‘Counter Culture’ destroys the civilization and re-creates the inner world, the Culture. The Counter-Culture flows in to the Culture (when there is Unity) and flows out of the Culture (when the Father-Aspect and the Son-Aspect begin to disagree).

The ‘Culture’ largely ignores the inner world, and, in so doing, allows the Dream-Body to wither. The ‘Counter-Culture’ largely ignores the outer world – hence, degeneration of the physical world occurs, economic depression being an aspect of this – and focuses on regeneration of the culture’s Dream-Body. Hence, the orthodox ‘Culture’ must focus on re-ordering the external world when it re-ascends to power, because the ‘Counter-Culture’ has allowed the Physical Body to become weak and disordered (the Night has abandoned the physical body).

‘Eternal life’ depends upon the vitalization of both bodies – the Physical Day Body and the Dream Night Body. When Day comes, we inhabit the Physical Form. When Night comes, we inhabit the Dream Body.

Building civilization is a Day activity. Building culture is a Night activity. The Sun is the great builder of Nature during the Day. The Sun, through the vehicle of the Moon, is the great builder (nurturer) of Nature during the Night. The Sun powers the Mind through the brain. The Moon powers the Soul through the heart. The Day is ruled by the Fire of the Sun. The Night is ruled by the Water of the Soul.

Generally speaking, the Republicans are Cowboys, and Democrats are Indians. The Republicans are the male-energy; Democrats are the female-energy. Generally speaking. The most recent manifestation in American politics of the Cowboy spirit began in 1982 with the advent of Ronald Reagan, the ultimate Cowboy Archetype, and ran through 2008. George Bush and John McCain were also manifestations of the Cowboy Nature. Reagan was the Cowboy Archetype re-born after a long retreat, disappearance and germination – the Cowboy again rising at the beginning of a Day Cycle. Bush and McCain were manifestations of the Cowboy Nature at the end of the Day cycle, worn out, defeated, declining.

Obama is a manifestation of the Indian Nature after a long period of Cowboy Rule. Obama is a symbol of the refreshed Indian, as Jimmy Carter was a symbol of the enervated, defeated Indian Nature.

Franklin Roosevelt as a manifestation of the re-born Indian Nature also after a long period of Cowboy Rule (1911-1929).

Abraham Lincoln was a manifestation of the re-born Indian Nature also after a long period of Cowboy Rule (1839-1857).

John Kennedy, very similar to Lincoln, was a manifestation of the re-born Indian Nature after a long period of Cowboy/Businessman Rule (1947-1965). Later we will discuss complications both Kennedy and Lincoln present when looking at our dual historical time-scale.

During the Day Cycles, the polarization tends to be external, the country is united; during the Night Cycles, the polarization tends to be internal, the country is divided.

Democrats nearly always preside over the Darkness in American history, the defeat of the material nature. I write this with some hesitation, understanding that there is some disagreement among historians as to the definition of an economic depression, about where the barrier between a recession and a depression can be drawn; there is also the problem with an historical definition of Democrat and Republican. A Democrat today is much different than a Democrat in Abraham Lincoln’s time (when the ‘Democratic Republicans’ were the ‘Democrats’ of today). I might attempt to illuminate this latter problem by defining ‘Democrat’ as the party that cares more for racial and economic equality and by defining ‘Republican’ as the party that uses Biblical references to justify racial and economic inequality through individual destiny and freedom. In one sense, the Republicans use Old Testament Biblical references to justify racial and economic inequality in the interests of national exceptionalism (a ‘chosen nation’ status as defined by the national monotheistic God); and the Democrats use New Testament references to justify policies of racial and economic equality as penance for sins (ego-inflation) committed during the Day Cycles through an excessive sense of exceptionalism.

In fact, Day-Cycles are manifestations of the Old Testament; and Night-Cycles are manifestations of the New Testament.

The ‘Republicans’ also focus their philosophy on the opportunities for and the freedom of the individual; ‘Democrats’ focus their attention on what is good for the nation as a whole. ‘Republicans’ defend the corporation, which is both an individual entity, and a symbol of ‘bodily’ existence, a noun, a manifestation of ‘I am’ -- the life as the Ego. ‘Democrats’ defend co-operation, a verb, an (moral) activity, a manifestation of the Self and the collective experience.

I am not making moral judgments in this description. The Cowboy responds to an external threat – and to the re-polarization of life that occurs as the Darkness is ending. The Cowboy defends the laws that define the life of the civilization. The Cowboy drives off the criminal darkness, the dangerous storm clouds, which have aggregated during the Night, with real intentions of suffocating the society through violence and revolution.

Reagan ‘saved’ America from the self-hatred of Jimmy Carter, as the Dawn returned and ‘re-incarnation’ was demanded. Re-incarnation, in this sense, happens every day when the human awakens from sleep, and resurrects the ‘personality’ of the Ego which has lost its structure during a night of sleep. (Reincarnation also works on larger scales of manifestation.)

Reagan re-introduced the structure of the American personality after that personality had been crucified during the Darkness of the 1960’s and especially 1970’s.

I believe Jimmy Carter saw himself as a messiah figure, a shadow of Christ (his initials J.C. perhaps helping to illuminate this destiny to him). Jimmy Carter put himself upon the cross in order to pay for American sins of the Indian Wars, slavery, racial discrimination and persecution, inequality in American society, immoral foreign intrusions in Latin America and Asia, most recently in Vietnam.

The Darkness is a time of self-judgment, self-condemnation, as the sins of the Day are visited upon the nation, illuminated in the Soul by the pure light of the Moon. Each incarnation brings more sins the society must face during the Night. That is why the Wheel of Incarnation (Re-Birth) is considered the vehicle of Karmic Debt.

Our Cowboy defends freedom in the world. That is the positive side. But there is a shadow side to this also. Our Cowboy defends freedom in the world so that American corporations can do business in foreign countries, enabling Americans can enjoy a higher standard of living – this often involves the suppression of legitimate political goals of foreign countries and foreign nationals, even to the point of the U.S. injecting marines in foreign countries to ensure the freedom of American corporations to profit from foreign enterprises.

The U.S. military is the ‘muscle’ of American business. Nations who follow the capitalist model – and which allow American business to operate and profit – become our allies. In this we are not so different than most nations of the world, during their expansionary, civilization, empire stage. But there is a moral cost to all this. Karmic debt accrues. Much of the social and moral chaos that occurs during the Dark Phase of the Winter months in a society is caused by the selfish, isolated Ego acting out its survival instincts during the Day. The Soul judges the Body, and condemns the Body as being immoral. Civil War often becomes the result of this Karmic self-judgment. Revolutions are the children of the Night. Religious re-births are also the product of the Night cycle.

The Soul is pure, perfect, because it is the principle of Life, taking the shape of the body that contains it. The Body is not pure or perfect. The Body despises the Soul during the Day for its weakness and ineffectuality. The Soul cannot get things done, and is literally helpless in the practical world. The Soul despises the Body during the Night for its immorality, and its aggressive selfishness, and lack of imagination and spiritual essence.

During the Day, white judges black. During the Night, black judges white.

During the Day, white becomes black with sin. During the Night, black becomes white through an alchemical purification process, by washing itself white in the light of the Moon and through the fire of its own empyrean suffering and ‘emptying’ condition. The soul returns to its source, to its original condition.

Day Energy is hierarchical since it is fighting a real or perceived war against the Darkness in an attempt to live, in an attempt to suppress the Darkness, and create a sanctuary that excludes the darkness. Michael the Archangel is a Christian form of Apollo when he drives the Darkness out of heaven and chains Satan in the underworld. As Spring winds drive away Winter storm clouds, so do the Cowboys drive away Night-world pessimists after re-birth.

Reagan drove away Carter pessimists (self-destructive passive moralists) through the sheer power of his positive energy, after the Democrats had ruled the Darkness in America from 1965 through 1982. The positive energy has to build, has to generate forms.

Of course, there are democratic presidents who rule during the Day phase (Bill Clinton was a recent example of this). And republican presidents also rule during the Night phase (Richard Nixon was an example of this).

I remember a few years ago when my elder brother scoffed -- when recalling Nike’s motto: “Just do it! -- ‘That’s right! Just do it! Don’t think about what you are doing!’ My brother was in the grip of Apollonian reflective, inactive energy. My response was: ‘Just do it! Don’t talk about it!’ I was in the grip of Dionysian energy of will and activity.

Dionysus must act. The external world is his playground. Apollo must think and talk. The world of ideas is his playground.

As I have written earlier, the illusion is that these are two separate entities. Apollo is Dionysus (anti-Apollo) at an earlier stage of his life. Dionysus is Apollo (anti-Dionysus) at both an earlier and a later stage in his life. Human life begins in Apollo, becomes Dionysian, and then re-becomes Apollonian once again. The child is Apollo; the adult is Dionysus; the defeated adult is Apollonian once again.

These three steps relate to the Christian Trinity, and also to the ‘three steps of Vishnu’ in Hindu mythology, and the three aspects of divinity: Brahma, who creates through the mind, Vishnu, who preserves through the body, and Siva, who destroys again through the mind (or Spirit).

So, we have concluded that, indeed, there are cycles in Human Manifestation. Can we measure these historical cycles accurately?

Can we even get historians to agree on when economic depressions occurred in America? I don’t think we can. Part of the problem is distinguishing a ‘recession’, matter approaching a small black hole, from a ‘depression’, matter approaching a large black hole.

I believe the astronomical metaphors are appropriate. Others may find this representation of a metaphorical truth as a physical reality to be troubling. The Day World is ruled by literalism, linear rationality, and causality. The Night World is ruled by metaphor, analogy, and symbolism. In the Day World: ‘This is caused by that’. This is a description of the straight line: Time running from Past through Present to Future, sequentially.

In the Night World: ‘This is related to that. (And everything, indeed, is related.)’ This is a description of the circle, with a network of connecting lines – more like a spider’s web: a matrix, with connections running from all directions. This is a view of simultaneity: all Times (past, present and future) existing in the same container, connected through the graces of…metaphor, analogy, through a kind of optical overlay, with patterns inside of patterns. We will look at this again later.

An economic depression is a large entity, state or systems of states, collapsing in on itself. A black hole is a large astral entity (a massive star) collapsing in on itself. The gravity is so strong in a black hole that no mass falling in to perimeter of its influence can escape the gravity of its downward pull. No amount of matter thrown at the black hole will escape the gravity, the downward pull of the black hole.

What is the white hole, then? A maddening kind of symmetry seems to exist in Nature. A black hole is a region of space from which nothing can escape. A white hole (a time-reversed version of a black hole) is a region of space into which nothing can fall. A black hole can only suck things in; a white hole can only spit things out. The Black Hole is the Force of Night; the White Hole is the Force of Day.

Is it possible, using Time’s symmetry as a model, that a black hole could evaporate into a white hole over time, recycling energy back in to the system through this inner transformation? This model of energy recycling seems to have been very ably anticipated by an age-old Asian glyph that also represents the relationship between Apollo and Dionysus, and between the Solar Day Force with its weakened Lunar Night Force and the Lunar Night Force with its weakened Solar Day Force.

How many depressions has America experienced in the Twentieth Century? We can all agree on one, although historians will argue when it began and when it ended. For argument’s sake, let’s say it started in 1929 and ended in 1947 – many economists, I trust, would accede to this. This may be right or wrong – but we can live with it at the moment.

Ok. We are now experiencing perhaps the second depression in the last 100 years. Did this begin in 2001, with the bursting of the dot com bubble? Or did it begin in 2007, with the breaking of the housing bubble?

For argument’s sake, let’s say 2001 (despite Alan Greenspan’s best intentions).

Recessions? Some historians also claim there was a recession in the U.S. from 1965 – 1983, during the long years of democratic rule, with unemployment rates as high as 9% nationally and an inflation rate of 13.5% in 1980. That sounds like a depression to me. There is no question that America was experiencing a spiritual depression in the 1970’s and early 80’s. America was undergoing an Ego-death Night experience then, with racial riots, unrest generated by an unpopular (many said racist-) war; this period was also distinguished by a huge growth in interest in Asian mysticism, a sign of Night-Cycle inundation.

In my mind, economic recession/depressions/stagflations are not measured by GDP growth and decline, but are ‘spiritual deaths’ in much the same way that economic expansions are national Ego inflations (symbolized by the erect male sexual organ)…the man taking ‘heaven by force’, expanding its influence, realm of law, business-interest imperative. ‘Spiritual deaths’ – using the same metaphor – represent the male imperative in its flaccid state, impotent in the world. It is interesting that the ‘viagra era’ has swept over the entire earth. This is, when seen in its unconscious meaning, an attempt by the masculine Ego-Force to short-circuit the approaching Night through the use of mind/technology and pharmaceutical magic. This won’t work, of course. Nature is very demanding; and Nature wins during the Night-Cycle. I would not be surprised to see use of Viagra be linked to some form of health plague eventually. Sixty-year-old men are not supposed to be sixteen. The fact that sixty-year-old men want to be sixteen says much about the spiritual vacuum in which we live today – the pleasures of life are linked to the sex organs and to the sex organs alone.

Interestingly, if we take the following years as starting points for American recessions/depressions since 1900:

1929

1965

2001

…we find that there are exactly 36 years between the start of each depression. Being an amateur mathematician, I assume that a full cycle (from recession to recession) of 36 years implies a Day cycle of 18 years and a Night cycle of 18 years. Is there that much symmetry in economic history?

Perhaps. (As I have written, reasonable historians can argue about the starting and the ending dates of something as nebulous as a depression, as they can also argue the characteristics and real nature of an economic depression. But, for the sake of argument, let’s proceed.)

1929 - 1947: 18 years

1965 – 1983: 18 years

2001 – 2019: 18 years

If there is truth in these numbers, and there is some kind of sacred discipline involved in historical manifestation, then the following years should have also displayed such peaks and valleys of American economic expansion and contraction.

1713 Night Cycle Ego Deflation begins – 1731 Day Cycle Ego Inflation begins

1749 Night Cycle Ego Deflation begins – 1767 Day Cycle Ego Inflation begins

1785 Night Cycle Ego Deflation begins – 1803 Day Cycle Ego Inflation begins

1821 Night Cycle Ego Deflation begins – 1839 Day Cycle Ego Inflation begins

1857 Night Cycle Ego Deflation begins – 1875 Day Cycle Ego Inflation begins

1893 Night Cycle Ego Deflation begins – 1911 Day Cycle Ego Inflation begins

1929 Night Cycle Ego Deflation begins – 1947 Day Cycle Ego Inflation begins

1965 Night Cycle Ego Deflation begins – 1983 Day Cycle Ego Inflation begins

2001 Night Cycle Ego Deflation begins – 2019 Day Cycle Ego Inflation begins

Since American history is relatively short, it is difficult to test this hypothesis. However, judging from the century of so existence of the American Stock Exchange (Dow Jones Industrial Average), and using this as a gauge of economic expansion and contraction, it is apparent the stock market did follow the inflation-deflation cycles almost perfectly.

By being in the Dow Jones Industrial Average only during the Ego-Inflation or Day Cycles, one would have amassed profits of more than 1700%, or 41% per year. By being out of the Dow Jones Industrial Average during Ego-Deflation or Night Cycles, one would have missed losses of 51%, or 1.15% per year.

f

STOCK MARKET RETURNS

1923* DJIA @ 75.23 - 1929 DJIA @ 331.65: EGO INFLATION CYCLE: Positive 400% - 67% per year.

1929 DJIA @ 331.65 - 1947 DJIA @ 175.66: EGO DEFLATION CYCLE: Negative 47% : -3% per year.

1947 DJIA @ 175.66 - 1965 DJIA @ 854.36: EGO INFLATON CYCLE: Positive 386% : +22% per year.

1965 DJIA @ 854.36 - 1983 DJIA @ 1045.07: EGO DEFLATION CYCLE: Positive 22%: +1% per year.

1983 DJIA @ 1045.07 - 2001 DJIA @ 10,604.59: EGO INFLATION CYCLE: Positive 915%: +51% per year

2001** DJIA @ 11,000+ - 2019: EGO DEFLATION CYCLE (through 2/09 DJIA @ 7850.41): Negative 26%: -3% per year.

* Could not find DJIA prices back to 1911.

** Current deflation from 2001 to February 2009.

Of all the charts available, the index of the S&P 500 measured in terms of gold’s appreciation and depreciation seems the most accurate in pinpointing these 18 year cycles. A picture of the Day-Cycle of 1983 – 2001, and the Night-Cycle that is running from 2001-2019, is very clear in the following chart, provided by Clusterstock at BusinessInsiders:

Comparing the chart datapoints, the current level in 2010 compares with the 1973 level. The bottom of the earlier Night-Cycle was reached in 1983, 10 years later. Our current Night-Cycle is scheduled to end in 2019, nine years from now.

All three Bull Markets (Dow Jones vs Gold) and all three Bear Markets (Dow Jones vs Gold) have corresponded almost exactly to our Day-Cycle/Night-Cycle Twentieth Century schedule – Day-Cycle: 1911-1929; Night Cycle 1929-1947; Day-Cycle: 1947 – 1965; Night-Cycle: 1965 – 1983; Day-Cycle: 1983 – 2001; Night-Cycle: 2001 – 2019…

Many will argue that this kind of precision in Nature’s manifestations in the Human Kingdom is untrue and even ridiculous, an example of man seeking to impose order on Nature’s chaos. This may be true about everything humanity thinks. That is a separate issue.

Of course, scientists do not argue with the precision shown in Nature’s Time structures (Day, Month, Year, Sidereal Year, Cosmic Year). No one argues with the geometric precision of material structures: a common snowflake (a hexagonal crystal), a water molecule, an ice crystal, or methane. If Nature manifests geometrically, then why would Nature’s Time-Patterns not manifest with geometric precision?

Snowflake crystal Water molecule Ice crystal Methane

Sunspot cycles apparently happen each 11+ years. Each 28+ years Saturn returns to the same place in the heavens. Each 28+ days the Moon makes a complete cycle. Each 365+ days, the Sun makes a complete cycle. Jupiter returns to the same place in the heavens each 12+ years. Solar eclipses come in patterns that lay a lattice of light/shadow on the Earth running north to south or south to north every 18 years and 11 days, called the Saros Cycle. A catalog of Solar Eclipse Saros 127 shows a return of the eclipse in line with our Day-Expansion Night-Contraction cycles: (running from the future back in time, expected or documented) 2055, 2037, 2019, 2001, 1983, 1965, 1947, 1929, 1911, 1893, 1875, 1857, 1839, 1821, 1803, 1785, 1767, 1749, 1731, 1713…

In ancient myth, the wounding of killing of the Sun-Hero or Sun God signaled the decline of the Day and the manifestation of the Night-cycle – in effect, the power of the Sun was eclipsed.

There clearly seems to be order in Nature’s seemingly random manifestations.

The human calendar is a monument to the human understanding of Nature’s repeating patterns.

Ok, so Nature does work in repeating patterns. Even exacting patterns. Take the phenomena of Mautum (bamboo tree death) in Mizoram, a remote state in India. Every 48 years brown rats appear out of no where and destroy the rice fields in the area. This 48 year cycle stretches far back into history. What is the cause of this? The immediate cause is that for 47 years of the cycle there is not enough food in the forest to sustain the indigenous brown rat population. But every 48 years the bamboo forests in this region die; all the bamboo trees linked by an elaborate root structure die together. Each 50 years the bamboo trees flower; after the flowering, 2 years later the Melocanna bamboo drops a massive amount of bamboo fruit on the forest floor. Suddenly the forest has a huge amount of excess fodder. The rat population explodes, overruns the forest and the neighboring fields, destroying crops, leaving the inhabitants without subsistence rice for the year. Starvation ensues. Forty-eight years ago, this phenomenon led to an armed revolt against India, as the people of Mizoram felt their calls for help were ignored by Indian politicians.

So, the death and re-birth of the Melocanna bamboo forests cause the 48 year cycle of brown rat pests. But what causes the 50-year life-cycle of the Melocanna bamboo forests? Scientists have transplanted Melocanno bamboo trees from Southeast Asia half-way around the world, only to find that the South American transplants die at exactly the same moment that their siblings do in Mizoram or Thailand.

But what gives credence to the author’s 18-year cycles of American history? Do these cycles ‘work’? They seem to work with the stock market cycles, in a very imprecise sort of way.

I am no expert on American history. I wish I were. It would make this study much easier for me to complete.

My intent is to look at the perceived importance and stability of numbers (as emanations of God, or God’s thoughts) throughout history and then to attempt a deciphering of America’s very short history in light of these 18-year cycles.

1785 - Noon - high point of economic expansion

1794 - Dusk - Deconstruction wins

1803 - Midnight - high point of economic contraction

1812 - Dawn - Construction wins

1821 - Noon - high point of economic expansion

1830 - Dusk- Deconstruction wins

1839 - Midnight - high point of economic contraction

1848 - Dawn - Construction wins

1857 - Noon- high point of economic expansion

1866 - Dusk - Deconstruction wins

1875 - Midnight - high point of economic contraction

1884 - Dawn - Construction wins

1893 - Noon - high point of economic expansion

1902 - Dusk - Deconstruction wins

1911 - Midnight - high point of economic contraction

1920 - Dawn - Construction wins

1929 - Noon - high point of economic expansion

1938 - Dusk - Deconstruction wins

1947 - Midnight - high point of economic contraction

1946 - Dawn - Construction wins

1965 - Noon - high point of economic expansion

1974 - Dusk - Deconstruction wins

1983 - Midnight - high point of economic contraction

1992 - Dawn - Construction wins

2001 - Noon - high point of economic expansion

2010 - Dusk - Deconstruction wins

2019 - Midnight - high point of economic contraction

2028 - Dawn - Construction wins

I do remember from my Catholic education, that the history of Jesus Christ had a gap missing between his early education and his latter ministry, a gap of 18 years, during which time it is assumed he may have traveled to India to study mystical philosophy (and cycles) with the Hindus.

Constantly regard the universe as one living being, having one substance and one soul; and observe how all things have reference to one perception, the perception of this one living being; and how all things act with one movement; and how all things are the cooperating causes of all things which exist; observe too the continuous spinning of the thread and the contexture of the web."
- Marcus Aurelius

CHAPTER FIVE.

NUMBERS – AND THE NUMERICAL MANIFESTATION OF HISTORY

(Where Do Numbers Come From? What Do They Mean?)

‘You know, the difference between you and me is that I think

the world Is a circle, and you think the world is a straight line.’

Richard E. Nesbett, quoting a Chinese student: The Geography of

Thought: How Asians and Westerners Think Differently, And Why

Many readers may find this clear, exact numerology embedded in history (indeed, is the law of historical manifestation) impossible to fathom or believe. If this precision were inherent in Nature, why didn’t everyone know about it? Why was it such a mystery?

Of course, scientists do know about the precision of numbers. That’s what allows them to project a rocket into space for thousands of miles and have the rocket land on a dime. We know there is a precision of numbers in the physical world. Why would there not be a similar precision of numbers in the metaphysical world.

Pythagoras, the first great philosopher in classical Western culture, believed in the sacredness of number. To Pythagoras, God was number. Pythagoras claimed: ‘Number is the ruler of forms and ideas, the most ancient and ruling Deity. Number is the canon, the reason, the intellect and the most undeviating balance of the composition and generation of all things.’ According to Pythagoras, Number was the first essence of Nature. Pythagoras claimed that between men and numbers there was a science of correspondence.

Plato later wrote that ‘God is ever geometrizing’. Deity is Number; Number is Deity. Plato taught his students that ‘the Soul is a Number’. He would also write: ‘Geometry is the knowledge of the eternally existent’ – reminding me of what I wrote earlier about symbolic, scriptural, poetic language.

According to Orpheus: ‘the eternal essence of number is the most providential principle in the universe; it is the root of the permanency of divine things, of Gods and daemons.’

Porphyry writes that numerals were ‘hieroglyphic[al] symbols by means of which he taught ideas concerning the nature of things’.

These ideas of Number did not start with the Greek philosophers. The Greeks learned much from the Hindus in India and from the Egyptians. The Hindus had a highly-developed system of numbers and geometric symbolisms. For the Hindus, the universe begins in Darkness, the Unmanifest Unknowable Deity, Unchanging, Primordial Chaos, Zero, the Circle. The Zero transforms itself into One when the universe manifests, when the Night phase transforms into the Day phase. At the basis of all existence lies the binary system of zero and 1.

As the alarm clock of Manvantara (Day-Phase Activity) sounds, Deity transforms itself into 1, the Unity, the contained Universe, the Circle with a central point. This Deity then divides itself into 2 parts, the Duality, Light and Darkness, Day and Night, Activity and Rest, a Circle with a central diameter. Deity then manifests as the 3, the Mediating Middle Principle, Life, the Synthesis mediating the opposites, the Thesis and the Antithesis. The 3 then reflects itself below, creating the 4, the Sacred Square – or the Cube when taking on dimensionality – upon which model the entire universe is created. This Builder’s Square, of course, is again composed of a duality: two triangles offset as reflections.

The Hindus built an elaborate chronological exegesis based on the first four numbers of their cosmology: 4320, which acted as a numerical foundation-stone in Indian philosophy. The Hindus divided the duration of their four seasons (or Yugas) of Spring (Golden Age) Krita Yuga, Summer (Silver Age) Treta Yuga, Autumn (Bronze Age) Dwapara Yuga, and Winter (Iron Age) Kali Yuga into different lengths, their sum being 4,320,000 moral years.

Mortal years.

360 days of mortals make a year 1

Krita Yuga contains 1,728,000

Treta Yuga contains 1,296,000

Dwapara Yuga contains 864,000

Kali Yuga contains 432,000

The total of the said four Yugas constitute a

Maha Yuga 4,320,000

432,000 x 2 = 864,000.

432,000 x 3 = 1,296,000

432,000 x 4 = 1,728,000

The 4320 is truly the (smallest) building block of these time phases (432,000), and also the sum of the whole (4,320,000), both microcosm and macrocosm.

Interestingly, if one adds these ‘building block’ digits together, one arrives at one of the primary ‘building block numbers’ of time. 4 + 3 + 2 + 0 = 9.

Our 18 and 36 year cycles of American economic inflations and deflations are numbers that are, of course, divisible by 9.

Many ‘rationalists’ will dismiss this type of analysis as mystical hocus-pocus. The mathematician, however, will recognize immediately that these ‘magic numbers’ (magic years) are all ‘elements’ of the circle with its 360°.

One will notice quite quickly that the above Yuga numbers break down into interesting component sums:

4 + 3 + 2 + 0 = 9

8 + 6 + 4 = 18

1 + 2 + 9 + 6 = 18

1 + 7 + 2 + 8 = 18

Christian mystics assigned the Number 7 to the Virgin Mary since its was the only number among the numbers of the sacred dekad that could not divide the 360° of the circle as a whole number. The number 7 was ‘not touched’ (could not be divided) by the world.

1 360

2 180

3 120

4 90

5 72

6 60

7 51.4285

8 45

9 40

10 36

Deity, in every culture, has been represented by the circle, an emblem of unity and totality. Deity is the Being inside of which/whom we have our being. Deity is the bubble, the universe, inside of which we have our life. It is a leap, but not an unreasonable leap, to comprehend that each human soul or being is a cell in God’s Body – i.e., a circle inside a larger circle. Of course, we cannot know the being within whom we are living anymore than the cell in our own body can comprehend us, the totality, they help compose and animate.

This universe, of course, may be only a cell in a larger being. And this process may repeat for ever, smaller circles composing larger circles, and larger circles composing smaller circles, running for ever in both directions. Maybe for ever; maybe not forever.

Clearly, humanity can perceive larger circles than itself: the family is a larger circle, the town is a larger circle, the county is a larger circle, the state or district is a larger circle, the nation is a larger circle, the continent is a larger circle, the hemisphere is a larger circle, the planet is a larger circle, the solar system is a larger circle, the universe is a larger circle.

Humanity can also perceive smaller circles: the human organism is composed of cells, which is composed of molecules, which are composed of atoms, which are composed of a sub-atomic reality science does not fully understand at present.

Perhaps there are foundation stones on each end which cannot be split. This is possible. Poles which create a real boundary, inside of which lives or souls ascend and descend --Jacob’s Ladder seems to be the most common metaphor of this movement between poles. Jacob’s Ladder seems, in a metaphoric sense at least, very much like the chromosomal tree of life which informs all living matter.

Humanity can look through a telescope to see the larger circles of life; humanity can look through a microscope to see the smaller circles of life. This makes it appear that humanity is somehow in the middle between the two poles. This may or may not be true.

Jewish mythology represents Jehovah (Jod, the masculine, and Hovah, the feminine) – the duality instead of the unity – that is, the Creative God, the second manifestation of Deity, or Elohim -- as the ratio of the circumference of the circle to the diameter, or mathematically, Pi, 3.1415.

The circle is the bubble environment inside of which the Day-Phase activity takes place, the empty atom of Ego existence, which seems full, until the bubble breaks, and the Day-Phase inflation ends, and contraction or deflation begins.

ALHIM, Elohim, has the following symbolic numerical correspondence:

(A) = 1

(L) = 3

(H) = 5

(I) = 10 or 1

(M) = 40 or 4 =

13514, which, by transmutation, becomes 3.1415, or Pi. (In Jewish Gematria, or number symbolism, numerals and letters in a system can be re-ordered and read in different patterns as a way of metaphorically linking similar ideas or phenomena.)

Adding the numbers together (1 + 3 + 5 + 1 + 4) equals 14, which relates this to the Hebrew words for ‘gold’, ‘love’, ‘hand’, ‘garment’, ‘beginning’, ‘Beloved’, ‘David’, ‘valley’, ‘enough’, and ‘afraid’. (Interestingly, in the context of this book, the Hebrew word for ‘love’ is ‘ahab, which connects us back to our theme of megalomaniac light/darkness and Melville’s prophecy concerning the destiny of America.)

Reading the above number (13514) geometrically, we have a point, a triangle, a pentagram, a point, and a square. The 354 of this number-glyph describes the number of days there are in a lunar year, connecting Jehovah as Elohim to the Lunar or Night-Phase of the cycle.

It is during the Night, after the deflation, that God visits the Soul and offers the covenant of Life, the contract of physical re-birth.

Jehovah (Yah – Father, He – Mother, Vau – Son, He – Daughter) also corresponds to Saturn. Hence, the Jewish Sabbath is Saturday, Saturn’s Day. And the Sabbath is the 7^th and last Day of Creation, at which time all activity ceases…the perfection of creation is reached…and the bubble of Day-Activity is popped. This is the point at which Humanity must once again face its creator and be judged.

Saturn is known as Father Time, the Great Harvester, the Father Who Eats His Own Children. Saturn presides over the end of the world, the deflation of the Day-world back to the Nothingness of Night, back to God, or to Zero, formlessness (pre-atomic bodilessness).

Jehovah-Saturn is the God who both gives and takes away – that is, gives when He blows the bubble and creates Time-Space as we know it – the Day Cycle -- and takes away when He pops the bubble and brings about the Darkness of the naked soul standing before Eternity without a shell or a body and with no where to hide.

Saturn, the planet, returns to the same position relative to the Earth (approximately) every 28 years. Because the Moon’s cycle is (approximately) 28 days, Saturn is considered intimately connected to the Lunar Cycle; Saturn was always considered a Lunar God, governing the advent of both the Day and Night Cycles.

Significantly, Tetragrammaton, IHVH, the symbolic glyph for Jehovah-Saturn, has the corresponding numerical values:

I: 10

H: 5

V: 6

H: 5

= 26

I: 10

I + H: 15

I + H + V: 21

I+ H + V + H: 26

= 72

4-fold components of 72:

72

54

36

18

As should be readily apparent, ancient religious thought and numbers have always had an intimate connection.

The great Chinese philosophical system, The Book of Changes – I Ching – also indicates the importance of the number 9 and its building-block qualities (especially in its form of 9 x 4 = 72). W, K. Chu and W.A. Sherrill translate and comment upon the ‘Ho Map Lo Map Rational Number Manuscript’ in their books The Astrology of the I Ching:

Daily Calculation Cycles

The several aspects of the yearly hexagram control the daily cycles for the entire year. These are closely associated with the five elements: water, wood, fire, metal and earth. Each of these five elements is considered dominant for about 72 days each year, with the exception of the earth, which is given as the principal influence for 77 days a year…

Earth is believed to interact with the other elements at all times, and to come into dominance over its associated element during the last stages before each of the solstices and equinoxes. In calculating the length of time between seasons, it is found that, between the autumnal and the vernal equinox, the number of days is more or less exactly 180 days, whereas between the vernal and the autumnal equinox are 185 days plus. With this astrology being largely based on the influences of the sun and the earth, the extra days beyond 360 (5 elements multiplied by 72 day) are considered to be under the dominance fo the element earth. Hence, as will be seen subsequently, the hexagrams representing the element earth will influence these extra days. Compensation is thereby made for the fact that the winter solstice varies in its time of commencement during the appropriate days.

In connection with the foregoing, when one is analyzing any particular day one should also examine the preceding and succeeding days, as the cycles are not precisely defined as to where one begins and another ends, but, rather, represent a continuum of change.

An astrological year (beginning with the winter solstice) is cominated by the five elements approximately as follows:

(a) Water 72 days

(b) Earth 18 days

(c) Wood 72 days

(d) Earth 20 days

(e) Fire 72 days

(f) Earth 21 days

(g) Metal 72 days

(h) Earth 18 days

Seventy-two days (72) is the length of time it takes for a hexagram to change to its opposite and then return to its original state, allowing each line to be the controlling line for a day. The days start at the bottom line and move upwards. Thus each hexagram controls a six-day period, before changing into the next hexagram (the changes entering at the bottom and continuing to the top) when another six-day cycle takes place. A hexagram goes through its complete cycle of evolution in seventy-two stages, during which the controlling element (water, wood, fire or metal) goes through its seventy-two day cycle and exerts its controlling influence for that period of time, according to its stage of evolution on any given day.

The Heavenly Ideal of the Circle apparently translates to the moving earth as a 365-day orbit, not the 360 day orbit an Ideal Geometer might expect. Apparently the Earth is not traveling fast enough. If it were traveling at 30.23379 kilometers per second, then there would be 360 days in the year; instead it is traveling 29.79 kilometers per second. This difference is about 20 minutes per day. It seems that the Earth is a bit overweight.

I guess this is just one of the many imperfections on Earth. (Afterall, Heaven is the plane of perfection and perfect archetypes; Earth the plane of imperfect approximations of the archetypes. An architect’s blueprints may be perfect but this apparently does not mean that the building will be perfect.)

Joseph E. Mason, in his article ‘The Cycle of Time Number 432’ quotes mythologist Joseph Campbell’s ‘The Inner Reaches of Outer Space’ in which Campbell draws a comparison between the Babylonian and the Jewish Flood Myths (Genesis). Campbell shows that the ten kings living in Babylon from creation to the time of the flood lived a total of 432,000 years.

Sumerian King List

King City Year

Aloros Babylon 36,000 (3 + 6 = 9)

Alaparos Unknown 10,800 (1 + 8 = 9; 10 + 8 = 18)

Amelon Pautibiblon 46,800 (4 + 6 + 8 = 18)

Ammenon Pautibiblon 43,200 (4 + 3 + 2 = 9)

Amegalaros Pautibiblon 64,800 (6 + 4 + 8 = 18)

Daonos Pautibiblon 36,000 (3 + 6 = 9)

Euedorachos Pautibiblon 64,800 (6 + 4 + 8 = 18)

Amempsinos Laragchos 36,000 (3 + 6 = 9)

Otiartes Laragchos 28,800 (2 + 8 + 8 = 18)

Xisouthros Unknown 64,800 (6 + 4 + 8 = 18)

Total years = 432,000 (4 + 3 + 2 = 9)

The Babylonians viewed a natural division of time and space (360°) from units of both 6 and 10, the hexi-decimal system.

In the Book of Genesis, there are also 10 Patriarchs between Adam and Noah (the Flood). These also each live many years. Noah was 600 years old when his Ark landed on Mount Ararat.

Dates in Genesis

Antediluvian Patriarch

Adam (Gen 5:3-5) 130

Seth (Gen 5:6-8) 105

Enosh (Gen 5:911) 90

Kenon (Gen 5:12-14) 70

Mahalalel (Gen 5:15-17) 65

Jared (Gen 5:18-20) 162

Enoch (Gen 5:21-24) 65

Methuselah (Gen 5:25-27) 187

Lamech (Gen 5:28-31) 182

Noah (Gen 7:6) 600

Total years until Flood = 1,656 (1 + 6 + 5 + 6 = 18)

16 + 56 = 72

These 1656 years, multiplied by Jehovah’s gematrial number, 26, (Jod = 10; He = 5; Vau = 16; He = 5) is 43,200. Also 1656 years equals 86,400 weeks, which, when halved, equals 43,200.

Joseph Campbell also points out that in the Viking Eddas, on the Day of Ragnarok, the ‘Twilight of the Gods’, 800 divine warriors appeared out of the 540 Doors of Valhalla. 800 x 540 = 432,000.

The Rig Veda, the most ancient of Vedic texts in India, is composed in 10,800 stanzas. Each stanza is composed of 40 syllables. This means that the entire composition contains 432,000 syllables.

Where does this number 4320 come from in Nature? From astronomy, which was linked with astrology in ancient cultures, since ancient societies did not rigidly separate external (measurable) and internal worlds. As above, so below. As within, so without. The inner and the outer worlds were reflections of each other.

The earth wobbles 1° every 72 years. This wobble is caused by the gravitational pull of the sun and the moon about the equator. This causes the precession of the equinoxes, the slow retrograde, or westward motion of equinoctial points along the ecliptic and the resulting earlier occurrence of equinoxes in each successive sidereal year. The ecliptic is the great circle on the celestial sphere representing the sun’s apparent path during the year. The ecliptic gets its name from the fact that lunar and solar eclipses can occur only when the moon crosses this line.

If the earth wobbles 1° every 72 years, how much does it wobble in 360 years, the full cycle of the circle? 72 x 360 = 25,920 years. This is the Great Year, called by some a Platonic Year. 25,920 years divided in to 12 constellations (analogically comparable to our months on earth) = 2,160 years.

(Incidentally, adding this number internally, 2 + 1 + 6 + 0 = 9, the same as magic number 4320.)

25,920 years divided by 6 = 4320.

Of course, 360° times 12 also equals 4320.

Ancient astronomers reasoned that it took 2,160 years for the Sun to pass through each constellation in the sky during this 25,920 years of the Platonic Year. By back-dating Time, they concluded the division of solar years spent in each zodiacal sign and devised the myth of the Solar Hero passing through 12 houses each Platonic Year cycle:

Sun Sign Eras

Leo (Lion) 10,800 - 8,640 BC (10 + 8 = 18) (8 + 6 + 4 = 18)

Cancer (Crab) 8,640 - 6,480 BC (8 + 6 + 4 = 18) (6 + 4 + 8 = 18)

Gemini (Twins) 6,480 - 4,320 BC (6 + 4 + 8 = 18) (4 + 3 + 2 = 9)

Taurus (Bull) 4,320 - 2,160 BC (4 + 3 + 2 = 9) (2 + 1 + 6 = 9)

Aries (Ram) 2,160 BC – 0 (2 + 1 + 6 = 9)…

Pisces (Fish) 0 - 2,160 AD

Aquarius (Water jug) 2,160 - 4,320 AD

Capricorn (Goat) 4,320 – 6,480 AD

Sagittarius (Archer) 6,480 – 8,640 AD

Scorpio (Scorpion) 8,640 – 10,800 AD

The much-discussed Aquarian Age, which will begin in 2160 AD, is part of a mathematical division of the circle and observations of astronomers viewing the sun’s passage through the heavens from the perspective of the earth. Whether there is any ‘truth’ to this mythological view of the Solar Journey is a much different issue than it being superstitious nonsense. It is based on a form of reason and on mathematics, seen through the metaphorical lens I mentioned as being the ‘logic’ of the Night Cycle, as opposed to the causal lens which views Day Cycle phenomenon.

Astrology is built upon an illusion, the illusion that the Sun travels through ‘houses’ of the zodiac. This illusion only seems true from the perspective of the Earth. However, this does not negate the value of the metaphorical truth of the zodiac, which is, afterall, a record of the human journey on earth through life stages contained within the eternal circle of birth – maturity – decay – death. If this journey is told in a metaphorical or symbolic language then one must understand that symbolic language to be able to comprehend the true meaning of the story. This language describes the journey through the Night, when the body has been lost. The Night is the Sea of the Unconscious. It is the world upon which Noah travels (Ahab too) when darkness has fallen upon the world.

The Zodiac is actually the description of a human life system on Earth (physical, psychological, and spiritual) that is projected through the Sun (the symbol of the Soul) into the heavens. The illusion is that the Sun ‘moves’ through these astrological houses in the heavens. That does not, however, render the symbolic description of stages and joys and conflicts of human life on earth invalid. The ancients studied themselves, their own transformations and trials in life – and ascribed these same episodes and logics to the Sun (the Oversoul) as a metaphorical allusion, linking Heaven and Earth.

In the previously-mentioned Rig-Veda: ‘The 12-spoked wheel (of time) in which the 720 sons of Agni are established…’ 12 x 720 = 8640. Which is our 4320 multiplied by 2; and which appears prominently in the division of the Sun Seasons above.

The Mayan ‘long count’ is also based upon similar heavenly observation. 1 Tun = 360 days; 1 Katun = 7,200 days (360 x 20); and 15 Katuns = 2,160,000 (6000 x 360) days. Their great cycle was believed to last for 13 Baktuns or 1,872,000 (5200 x 360). It is the present Baktun which is set to end on 22 December 2012. Many people are convinced that the world will actually end in 2012.

Interestingly, from our earlier example, showing that 7 is the only number in the dekad that does not divide the circle evenly (360° divided by 7 = 51.4285): Matthew 1:17 states that there were 42 generations (3 groups of 14) from Abraham to Christ. From Abraham to Jesus Christ is a total of 2,160 years. If you divide 2,160 by 42 you get 51.4 years as being the time signifying a generation.

72 hours contain 4,320 minutes.

54 hours contain 3,240 minutes.

36 hours contain 2,160 minutes.

18 hours contain 1080 minutes.

Luis Miguel Goitizolo, in his book The Wheel of Time writes:

Now, in connection with these two key numbers, 72 and 25,920, there are extremely suggestive coincidences that evidence a perfect correspondence between the life of man, the ‘microcosm,’ and that of our universe, or ‘macrocosm.’

For one thing, 72 corresponds to the average number of beats of the human heart in a minute, and a quarter of 72, or 18, to the human breathings in the same period, so that in one day a man will have breathed 18 x 60 x 24 = 25,920 times.

On the other hand, after 72 years, which is the average length of life of man at present, a man will have lived a total 25,920 days (assuming an ideal year of 360 days), while the Earth’s axis will have barely traveled a degree of the equinoctial circle of 360 degrees or 25,920 common years. In other words: from a cosmic view, man’s life lasts only one day.



The number 72 appears frequently in connection with cosmic cycles. For example, it appears in the Chinese magical square and corresponded, in the Far–Eastern tradition, to the division of the year in five parts (5 x 72 = 360), out of which three (3 x 72 = 216) were “Yang” or masculine, and two (2 x 72 = 144) “Yin” or feminine.

I will mention, in passing, that this division of the year was also used by the ancient Incas. Among the ancient Egyptians, in turn, 72 are the plotters who stand by Seth in his scheme to kill Osiris. 

Again, remember that 72 were the disciples of Jesus (12 apostles and 72 disciples), 72 the members of the Jewish Sanhedrin and, in the Middle Ages, the articles of the Rule of the Order of the Temple were also 72.

So, the ancient Babylonians, Mayans, Egyptians, Chinese, Indians, Greeks, and Jews generated philosophers and philosophies that calibrated philosophical truths -- and their historical shadows -- on the basis of geometric archetypes. It is also interesting to note that the Chinese division of the year into 5 parts, 3 Yang and 2 Yin all add up, through internal addition, to 9. (3 + 6 + 0 = 9; 2 + 1 + 6 = 9; 1 + 4 + 4 = 9.)

Let’s complete the Hindu cosmology:

Mortal years.

360 days of mortals make a year 1

Krita Yuga contains 1,728,000

Treta Yuga contains 1,296,000

Dwapara Yuga contains 864,000

Kali Yuga contains 432,000

The total of the said four Yugas constitute a

Maha Yuga 4,320,000

Seventy-one of such Maha-Yugas form the

period of the reign of one Manu 306,720,000

The reign of 14 Manus embraces the duration

of 994 Maha-Yugas, which is equal to 4,294,080,000

Add Sandhis, i.e., intervals between the reign

of each Manu, which amount to six

Maha-Yugas, equal to 25,920,000

The total of these reigns and interregnums of

14 Manus, is 1,000 Maha-Yugas, which

constitute a Kalpa, i.e., one day of Brahma 4,320,000,000

As Brahma's Night is of equal duration, one Day

and Night of Brahma would contain 8,640,000,000

360 of such days and nights make one year of

Brahma make 3,110,400,000,000

100 such years constitute the whole period of

Brahma's age, i.e., Maha-Kalpa 311,040,000,000,000.

All of these numbers are divisible by 9. Cycles of 9, 18, 36 and 72 years are all part of the smaller cycles manifesting as history.

Luis Goitizolo writes about this 311 trillion number of duration:

The immensely vast length of 311,040,000,000,000 common years that the texts implicitly assign to the great cycle of cosmic manifestation, accommodates indeed comfortably the 15 billions of years estimated by modern physics as the age of the universe; and even if such length were deemed exaggerate – say it was a thousand times lesser, i.e. the actual figure was only 311,040,000,000 years, which is certainly not impossible if we stick to the foregoing considerations – even so the 15 billions of years would fit comfortably within that period. At any rate, it would mean that our universe is still very young and that we are now, within the immense cycle of universal manifestation, virtually at the beginning of an expansion period.

And indeed, it is amazing that it took literally millennia for the modern scientific circles to again conceive this ancient notion of a universe that “breathes,” i.e. a universe that has two phases, one in which it expands and the other in which it contracts; two phases which, by virtue of the correspondences to which cycles of any order of magnitude are subject, can be respectively assimilated to a Brahma’s Day and its corresponding Night…both phases of what the Hindus call (one) Manvantara.

The Greeks gave a different perspective to this same cosmic cycle number: 311,040,000,000,000. In Greek Gematria (number/alphabet symbolism), ‘Pythagoras’ = 864. Of course, 864 is implicit in and very apparent the Hindu system also. 432 x 2 = 864. (8 + 6 + 4 = 18.)

If we multiply 24 (hours in the day) times 60 (minutes in an hour) times 60 (seconds in a minute) we get 86,400 (seconds in a day). So this number has rather deep roots – and is not simply pulled, like a rabbit, out of a hat.

In terms of astronomical science, 864,000 is also the calculated diameter of the Sun in miles.

Along these same lines, the calculated diameter of the Moon is 2160 miles.

8640 (the Sun) is our magic 4320 number doubled.

2160 (the Moon) is our magic 4320 number halved.

Again, in our ‘Sun Sign Eras’ we see these numbers being repeated rather significantly:

Sun Sign Eras

Libra (Balanced Scales) 12,960 – 15,120 BC

Virgo (Virgin) 12,960 – 10,800 BC

Leo (Lion) 10,800 - 8,640 BC

Cancer (Crab) 8,640 - 6,480 BC

Gemini (Twins) 6,480 - 4,320 BC

Taurus (Bull) 4,320 - 2,160 BC

Aries (Ram) 2,160 BC - 0

Pisces (Fish) 0 - 2,160 AD

Aquarius (Water Jug) 2,160 - 4,320 AD

Capricorn (Goat) 4,320 – 6,480 AD

Sagittarius (Archer) 6,480 – 8,640 AD

Scorpio (Scorpion) 8640 – 12,960 AD

Libra (Balanced Scales) 12,960 – 15,120 AD

Since there are 2,160 minutes in 36 hours, and since these zodiacal cycles above are built in 36 hour segments (each with 4 seasons, making the numbers 9, 18, 27, 36 – note, 1 + 8 = 9; 2 + 7 = 9; 3 + 6 = 9) the totality of the small circle, representative of a complete ‘month’ of the zodiac), 36 ‘hours’ per segment x 12 ‘months’ = 432 (again).

An interesting correspondence with the number 36: if you add numbers 1, 2, 3….36, you get the number 666, the legendary number of the Anti-Christ (and the end of the world).

Interestingly, the diameter of the planet of Mars is 4320 miles.

We will look at all the planets in our solar system and their relation to the Ideal Circle later in this book.

In Greek mathematics, the two sacred forms were the Circle, the female principle, and the tetraktys, the male principle (the Triangle composed of 10 dots). Multiply “Pythagoras” (846) x the Circle (360°) x the Tetraktys (10) and you get 3,110,400. Adding additional zeroes will get us to the magic Hindu cosmology number.

Taking the original gematria number for ‘Pythagoras’, 864 and adding this to 864 multiplied by the Circle (360°), gives us 311,040 (3 + 1 + 1 + 4 = 9.). Then multiplying 311,040 by the Tetraktys (10, with an additional 0 added, or 100), gives us 31,104,000. Adding all three numbers together equals:

864 +

311,040 +

31,104,000 = 31,415,904. When we then move the decimal point 7 spaces (the perfect, indivisible number), we get 3.1415904 – which brings us back to the idea of pi, the relationship of the circumference of the circle to the diameter.

3 + 1 + 4 + 1 + 5 + 9 + 4 = 27. All of these numbers seem to be divisible by 9.

Which brings us to the mystery of the number 9. We’ll, first, need to remember that 9 is, in some ways at least, the last number. Zero is the first number, although some will argue that zero is not a number. And 10 is the zero on the next scale, one ‘orbit’ removed from the inner sanctum of numbers. 9 is the number of resolution. Pythagoreans called 9 the ‘ocean’ and the ‘horizon’, as all numbers are comprehended by and revolve within the number 9.

What does this mean: all numbers are comprehended by and revolve with the number 9? Well, it’s a bit complex.

The number 9 has a ‘special nature’, a mysterious character, which we will show in the following table.

What is so mysterious about the number 9. Well, first let’s look at the number sequence of 9 times the numbers 1 – 10.

9 x 1 = 9

9 x 2 = 18

9 x 3 = 27

9 x 4 = 36

Not much mystery there, right? It is intriguing that each of the products, when added together as individual numbers, also equals 9. 9 x 4 = 36 and 3 + 6 = 9. This is just the beginning.

Let’s look at a larger number:

9 x 13 = 117. Add the three individual components together: 1 + 1 + 7 = 9. Also add the larger two-number components together: 11 + 7 = 18. 1 + 17 = 18. And, running in reverse: 71 + 1 = 72. And 7 + 11 = 18. All sums are divisible by 9.

This is true of every whole number multiplied by 9.

This is strange enough. But then we begin to look at the patterns that are woven together by this process. One begins to see numbers acting a bit like atoms in different obits, each creating its own unique pattern and permutation of movements (laws). To see the pattern we must look at a large block of numbers.

Note how these numbers behave differently depending upon which direction the numbers of the product run: Tier 1 (product of 9 times x added left to right) results in the number 9 for every calculation except when the number enters a new decade, at which the number catapults forward to 18, then reverts back to 9 for the remainder of the decade. For example, 9 x 2 = 18 and 1 + 8 = 9; 9 x 3 = 27 and 2 +7 = 9…9 x 10 = 90 and 9 + 0 = 9. This all changes, however, with 9 x 11 = 99, at which 9 + 9 = 18; then 9 x 12 = 72 and (reverting back to) 7 + 2 = 9. This 9 holds true until the next decade ends, at which two numbers trigger 18 instead of one as in the earlier transition: 9 x 19 = 171 and 1 +7 + 1 = 9; 9 x 20 = 180 and 1 + 8 + 0 = 9; but 9 x 21 = 189 and 1 + 8 + 9 suddenly = 18 AND 9 x 22 = 198 and 1 + 9 + 8 = 18; THEN 9 x 23 = 207 and we again have the reversion: 2 + 7 = 9. This continues again until the third decade, at which time the said summing of the three numbers (left to right) results in three blocks of 18, instead of two at happened at the transition to the numbers 21 and 22. Now the numbers 31, 32, and 33 each result in 18, before the reversion to 9 again takes place. At the transition past 40, the numbers 41, 42, 43, and 44 result in 18, before the reversion back to 9. This is the kind of magic in numbers that thrilled Greek philosophers like Pythagoras and Plato. Plato wrote: “God is Number” and also “God geometrizes.”

The Tier 1 pattern continues at the gate of 50, 51-55 return 18; 56 reverts back to 9. At 60, 61-66 return 18; 67-90 revert to 9. At 70, 71-77 return 18; 78 reverts back to 9, the foundation stone. At the gate of 80, 81-88 return 18; 89 reverts to 9. At 90, 91-99 return 18; 100 reverts to 9.

Now what: we have reached 100. 9 x 100 = 900 and 9 + 0 + 0 = 9. Are we going to repeat the pattern of 1-100? No. 9 x 101 = 909 and 9 + 0 + 9 = 18. In fact, numbers 101-109 return 18. Will 110 revert to 9? No. 9 x 110 = 990 and 9 + 9 + 0 = 18. Is 18 in place now permanently? No. 9 x 111 = 999 and 9 + 9 + 9 = 27. We have leaped to a new family group or orbit. Sort of.

Number 112-120 revert back, inconceivable as it seems, to 9. And 121 and 122 (like 21 and 22) give 18; and 123- 130 revert back to 9.

Tier 2 is a different beast altogether, with a different set of behavior. Tier 2 (product of 9 times x added right to left) shows every branch of 10 numeral-groups sectioned into groups ‘orbiting’ together equidistance from zero. For example: 0 + 9 = 9; 1 + 8 = 9; 2 + 7 = 9; suddenly, after the first decade, there is a change of orbit; in this second orbit or group, all combinations equal 18; in the third group, all combinations equal 27; in the fourth group, all combinations equal 36. … This apparently goes on ad infinitem Numbers 1-10 = 9; 11-20 = 18; 21-30 = 27; 31-40 = 36; 41-50 = 45….

Tier 3 has a different set of behaviors. There is no tier three until the twelfth operation in our set: 9 x 12 which produces a three-number product: 108. Tiers 3, 4 and 5 all are produced from the interaction from a minimum of 3 numbers.

Tier 3 results from the adding the two numbers on the right side of the product to the 1 number on the left side (in our example of 9 x 12 = 108) from right to left 08 + 0 + 1.

Tier 4 results from adding the first two numbers on the right side of the product to the 1 number on the left side but reading the numbers right to left; (for 108) 80 + 1.

Tier 5 results from adding the first number on the right of the product to the two numbers on the left, but again reading the numbers right to left; (for 108) 8 + 0 + 1.

Tier 3 and Tier 5 both result in a ‘rational’ sequential reading of 9, 18, 27, 36, 45… to 99 (9 x 11) before returning to 9 and repeating this sequence ad infinitem. It is interesting that multiples of 11 act as the end-point in this system, reverting the readings back to the beginning for another round of readings.

Tier 4 reads this ‘rational’ sequence in reverse order: 99, 90, 81, 72, 63, 54, 45, 36… with one very important change. In each group of declining values one value is left out. For example, in the first family (9 x 11 = 99 through 9 x 20 = 180) there is no 90 reading; in the next group (9 x 21 through 9 x 30), 81 is missing; in the next group, 72 is missing…

Constant	Sequence	Product	Tier 1	Tier 2	Tier 3	Tier 4	Tier 5
9	1	9	0 + 9 = 9	9 + 0 = 9
9	2	18	1 + 8 = 9	8 + 1 = 9
9	3	27	2 + 7 = 9	7 + 2 = 9
9	4	36	3 + 6 = 9	6 + 3 = 9
9	5	45	4 + 5 = 9	5 + 4 = 9
9	6	54	5 + 4 = 9	4 + 5 = 9
9	7	63	6 + 3 = 9	3 + 6 = 9
9	8	72	7 + 2 = 9	2 + 7 = 9
9	9	81	8 + 1 = 9	1 + 8 = 9
9	10	90	9 + 0 = 9	0 + 9 = 9
9	11	99	9 + 9 = 18	9 + 9 = 18		99 = 0 = 99
9	12	108	1 + 0 + 8 = 9	10 + 8 = 18	8 + 0 + 1 = 9	80 + 1 = 81	8 + 1 = 9
9	13	117	1 + 1 + 7 = 9	11 + 7 = 18	17 + 1 = 18	71 + 1 = 72	7 + 11 = 18
9	14	126	1 + 2 + 6 = 9	12 + 6 = 18	26 + 1 = 27	62 +1 = 63	6 + 21 = 27
9	15	135	1 + 3 + 5 = 9	13 + 5 = 18	35 + 6 = 36	53 + 1 = 54	5 + 31 = 36
9	16	144	1 + 4 + 4 = 9	14 + 4 = 18	44 + 1 = 45	44 + 1 = 45	4 + 41 = 45
9	17	153	1 + 5 + 3 = 9	15 + 3 = 18	53 + 1 = 54	35 + 1 = 36	3 + 51 = 54
9	18	162	1 + 6 + 2 = 9	16 + 2 = 18	62 + 1 = 63	26 + 1 = 27	2 + 61 = 63
9	19	171	1 + 7 + 1 = 9	17 + 1 = 18	71 +1 = 72	17 + 1 = 18	1 + 71 = 72
9	20	180	1 + 8 = 9	18 + 0 = 18	80 + 1 = 81	8 + 1 = 9	0 + 81 = 81
9	21	189	1 + 8 + 9 = 18	18 + 9 = 27	89 + 1 = 90	98 + 1 = 99	9 + 81 = 90
9	22	198	1 + 9 + 8 = 18	19 + 8 = 27	98 + 1 = 99	89 + 1 = 90	8 + 91 = 99
9	23	207	2 + 7 = 9	20 + 7 = 27	7 + 0 = 9	70 + 2 = 72	7 + 2 = 9
9	24	216	2 + 1 + 6 = 9	21 + 6 = 27	16 + 2 = 18	61 + 2 = 63	6 + 12 = 18
9	25	225	2 + 2 + 5 = 9	22 + 5 = 27	25 + 2 = 27	52 + 2 = 54	5 + 22 = 27
9	26	234	2 + 3 + 4 = 9	23 + 4 = 27	34 + 2 = 36	43 + 2 = 45	4 + 32 = 36
9	27	243	2 + 4 + 3 = 9	24 + 3 = 27	43 + 2 = 45	34 + 2 = 36	3 + 42 = 45
9	28	252	2 + 5 + 2 = 9	25 + 2 = 27	52 + 2 = 54	25 + 2 = 27	2 + 52 = 54
9	29	261	2 + 6 + 1 = 9	26 + 1 = 27	61 + 2 = 63	16 + 2 = 18	1 + 61 = 63
9	30	270	2 + 7 = 9	27 + 0 = 27	70 + 2 = 72	7 + 2 = 9	0 + 72 = 72
9	31	279	2 + 7 + 9 = 18	2 7 + 9 = 36	79 + 2 = 81	97 + 2 = 99	9 + 72 = 81
9	32	288	2 + 8 + 8 = 18	28 + 8 = 36	88 + 2 = 90	88 + 2 = 90	8 + 82 = 90
9	33	297	2 + 9 + 7 = 18	29 + 7 = 36	97 + 2 = 99	79 + 2 = 81	7 + 92 = 99
9	34	306	3 + 6 = 9	30 + 6 = 36	6 + 3 = 9	60 + 3 = 63	6 + 3 = 9
9	35	315	3 + 1 + 5 = 9	31 + 5 = 36	15 + 3 = 18	51 + 3 = 54	5 + 13 = 18
9	36	324	3 + 2 + 4 = 9	32 + 4 = 36	24 + 3 = 24	42 + 3 = 45	4 + 23 = 27
9	37	333	3 + 3 + 3 = 9	33 + 3 = 36	33 + 3 = 36	33 + 3 = 36	3 + 33 = 36
9	38	342	3 + 4 + 2 = 9	34 + 2 = 36	42 + 3 = 45	24 + 3 = 27	2 + 43 = 45
9	39	351	3 + 5 + 1 = 9	35 + 1 = 36	51 + 3 = 54	15 + 3 = 18	1 + 53 = 54
9	40	360	3 + 6 = 9	36 + 0 = 36	60 + 3 = 63	6 + 3 = 9	0 + 63 = 63
9	41	369	3 + 6 + 9 = 18	36 + 9 = 45	69 + 3 = 72	96 +3 = 99	9 + 63 = 72
9	42	378	3 + 7 + 8 = 18	37 + 8 = 45	78 + 3 = 81	87 + 3 = 92	8 + 73 = 81
9	43	387	3 + 8 + 7 = 18	38 + 7 = 45	87 + 3 = 92	78 + 3 = 81	7 + 83 = 90
9	44	396	3 + 9 + 6 = 18	39 + 6 = 45	90 + 3 = 99	69 + 3 = 72	6 + 93 = 99
9	45	405	4 + 5 = 9	40 + 5 = 45	5 + 4 = 9	50 + 4 = 54	5 + 4 = 9
9	46	414	4 + 1 + 4 = 9	41 + 4 = 45	14 + 4 = 18	41 + 4 = 45	4 + 14 = 18
9	47	423	4 + 2 + 3 = 9	42+ 3 = 45	23 + 4 = 27	32 + 4 = 36	3 + 23 = 27
9	48	432	4 + 3 + 2 = 9	43 + 2 = 45	32 + 4 = 36	23 + 4 = 27	2 + 34 = 36
9	49	441	4 + 4 + 1 = 9	44 + 1 = 45	41 + 4 = 45	14 + 4 = 18	1 + 44 = 45
9	50	450	4 + 5 = 9	45 + 0 = 45	50 + 4 = 54	5 + 4 = 9	0 + 54 = 54
9	51	459	4 + 5 + 9 = 18	45 + 9 = 54	59 + 4 = 63	95 + 4 = 99	9 + 54 = 63
9	52	468	4 + 6 + 8 = 18	46 + 8 = 54	68 + 4 = 72	86 + 4 = 90	8 + 64 = 72
9	53	477	4 + 7 + 7 = 18	47 + 7 = 54	77 + 4 = 81	77 + 4 = 81	7 + 74 = 81
9	54	486	4 + 8 + 6 = 18	48 + 6 = 54	86 + 4 = 90	68 + 4 = 72	6 + 84 = 90
9	55	495	4 + 9 + 5 = 18	49 + 5 = 54	95 + 4 = 99	59 + 4 = 63	5 + 94 = 99
9	56	504	5 + 4 = 9	50 + 4 = 54	4 + 5 = 9	40 + 5 = 45	4 + 5 = 9
9	57	513	5 + 1 + 3 = 9	51 + 3 = 54	13 + 5 = 18	31 + 5 = 36	3 + 15 = 18
9	58	522	5 + 2 + 2 = 9	52 + 2 = 54	22 + 5 = 27	22 + 5 = 27	2 + 25 = 27
9	59	531	5 + 3 + 1 = 9	53 + 1 = 54	31 + 5 = 36	13 + 5 = 18	1 + 35 = 36
9	60	540	5 + 4 + 0 = 9	54 + 0 = 54	40 + 5 = 45	4 + 5 = 9	0 + 45 = 45
9	61	549	5 + 4 + 9 = 18	54 + 9 = 63	49 + 5 = 54	94 + 5 = 99	9 + 45 = 54
9	62	558	5 + 5 + 8 = 18	55 + 8 = 63	58 + 5 = 63	85 + 5 = 90	8 + 55 = 63
9	63	567	5 + 6 + 7 = 18	56 + 7 = 63	67 + 5 = 72	76 + 5 = 81	7 + 65 = 72
9	64	576	5 + 7 + 6 = 18	57 + 6 = 63	76 + 5 = 81	67 + 5 = 72	6 + 75 = 81
9	65	585	5 + 8 + 5 = 18	58 + 5 = 63	85 + 5 = 90	58 + 5 = 63	5 + 85 = 90
9	66	594	5 + 9 + 4 = 18	59 + 4 = 63	94 + 5 = 99	49 + 5 = 54	4 + 95 = 99
9	67	603	6 + 0 + 3 = 9	60 + 3 = 63	3 + 0 + 6 = 9	30 + 6 = 36	3 + 6 = 9
9	68	612	6 + 1 + 2 = 9	61 + 2 = 63	12 + 6 = 18	21 + 6 = 27	2 + 16 = 18
9	69	621	6 + 2 + 1 = 9	62 + 1 = 63	21 + 6 = 27	12 + 6 = 18	1 + 26 = 27
9	70	630	6 + 3 + 0 = 9	63 + 0 = 63	30 + 6 = 36	3 + 9 = 9	0 + 36 = 36
9	71	639	6 + 3 + 9 = 18	63 + 9 = 72	39 + 6 = 45	93 + 6 = 99	9 + 36 = 45
9	72	648	6 + 4 + 8 = 18	64 + 8 = 72	48 + 6 = 54	84 + 6 = 90	8 + 46 = 54
9	73	657	6 + 5 + 7 = 18	65 + 7 = 72	57 + 6 = 63	75 + 6 = 81	7 + 56 = 63

In terms of sexual symbolism, the Circle is the Womb (or Zero), the Diameter in the Circle is the Male Unit (number One -- the 1 inside the zero, or 10 the number of completion, male and female unified), which diameter divides the Circle in half, indicating polarity, or the Day-Cycle. Pictorially, the Male Principle starts at one point on the circle and draws a diameter to the other side of the circle: when the diameter (as an imagined entity) moves from one side of the circle to the other side: the Day ends. It is tantamount to having an orgasm. When the digit is rigid, it enters the womb; after orgasm it disappears; then the circle re-absorbs the male element for a period of rest, or pralaya. The womb is impregnated; 9 months later the world is re-born.

Of course, when the reader asks ‘What has this to do with the author’s major concept of cycles being of 18-years?’ I would reply that the Day-Cycle of the Male Principle dividing the Circle in half (with his Diameter) = 180° of the complete Circle 360°. The Day-Cycle is 18(0)°, the Night-Cycle is 18(0)° and, together, they make up the 36(0)° of a completed cycle.

God breathes spirit or energy into matter, creating the bubble that is and becomes physical existence (the physical, emotional, mental trinitary unit). God extracts energy from matter, breathing in, collapsing the bubble; and light vanishes. Light that is trapped in the bubble evaporates. Matter transitions into dark background matter. Background matter comes to the foreground in material form; and material form then recedes back into this background source radiation.

The Hindus call the Night of Brahma ‘Pralaya’. Pralaya is the period between two incarnations, two periods of activity, two Day-Cycles. In A Treatise on Cosmic Fire, Alice Bailey writes: ‘From the point of view of any unit involved, a pralaya is a period of quiescence, of cessation from a particular type of activity, involving objectivity; yet, from the point of view of the great whole with which the unit may be involved, a pralaya may be considered merely as a transference of force from one direction into another. Though the unit may be temporarily devitalized, as regards its form, yet the greater Entity persists, and is still active.’

A metaphor for this process of ‘a transference of force from one direction into another’ is provided by electricity. Electricity changes direction. Electricity flows from negative to positive during the Day Cycle; electricity flows from positive to negative during the Night Cycle. It is not possible to eliminate either part of this circuit (circle) without eliminating the phenomena of electricity entirely.

‘Though the unit (number 1) may be temporarily devitalized’ – the male organ, the Straight Line, the Diameter – ‘the greater Entity persists, and is still active’ – the female organ, the Circle.

Day activity ceases; form-building ceases; forms disappear as light disappears; human forms can no longer see the large world outside, and are forced to turn their vision inside, to their home, their family, their cave. They sleep. They become active in their dream body. They experience quiescence. They experience rest.

When the human wakes up the next morning, humans begin form-building again, picking up where they left off at the end of the previous day. Day-Time never goes backward. Night-Time is not the same as and does not comprehend Day-Time. Night-Time dissolves Day-Time; and, then, ineluctably, resurrects Day-Time. Day-Time feeds the Dream-Time; and Dream-Time feeds the Day-Time.

This is not a warm, fuzzy process, of course, where all oppositions are worked out amicably and without pain.

The Day and the Night are apparent enemies; and their ‘combination’ at Dawn and Dusk can produce the monstrous. The Day is Christianity; the Night is Islam. The Day is Capitalism; the Night is Communism. The Day is Tammuz, who gets eaten by a wild boar (the Night). (Attis and Adonis, also Sun Heroes, both fall from power at the Summer Solstice and get eaten by a wild boar). Set, the Egyptian Dionysius, is out hunting wild boar when he finds the body of Osiris (his brother, the Sun Hero, the Egyptian Apollo), whose body he then tears into 14 pieces and scatters across the land.

Why a wild boar? In Babylonia, the month of Haziran (June) derived from the Chaldean word ‘Hazir’ or ‘Hazira’, which also signified porcus or hog. Interestingly, Temmuz was the Babylonian word for the month of July.

In all ancient mythology we see an esoteric reference to Time and to Time’s cyclical structures – an archetypal structure or blueprint that exists on many different, alternating, and overlapping scales.

The Chinese believe in constant change, but with things always moving back to

some prior state. They pay attention to a wide range of events; they search for

relationships between things; and they think you cannot understand the part without

understanding the whole. Westerners live in a simple, more deterministic world;

they focus on salient objects or people instead of the larger picture; and they think

they can control events because they know the rules that govern the behavior of objects.

Richard E. Nesbett: The Geography of Thought:

How Asians and Westerners Think Differently, And Why

CHAPTER SIX.

TIME CYCLES IN HISTORY

(Looking at the Prototype in Microcosm)

A hero is devoured by a water-monster in the West… The

animal travels with him (inside) to the East… Meanwhile

the hero lights a fire in the belly of the monster…and, feeling

hungry, cuts himself a piece of the heart. Soon, afterwards, he

notices that the fish has glided on to dry land; he immediately

begins to cut open the animal from within; then he slips out.

It was so hot in the fish’s belly that all his hair has fallen out.

The hero may, at the same time, free all those who were

previously devoured by the monster.

-- Frobenius, Das Zeitalter des Sonnengottes

The academic study of Western History has an implicit (agreed-upon) Time structure currently in place although current usage probably is more habitual than enlightening today in terms of both structural complexity and complicity. Terms such as ‘middle ages’, ‘renaissance’, and ‘dark ages’ refer to times of the day and seasons of the year – although current usage rarely, if ever, translates these descriptions as elements in a time-centered historical metaphysic.

In my interpretation of these terms, the Dark Ages are the Nights or the Winter season in Western Civilization, times during which the ‘light of civilization’ has vanished. The Dark Ages in Western History began essentially with the gothic destruction of Rome as the capital and symbol of Western Civilization, the world-city 2000 years ago. The Dark Ages rule for approximately 1,000 years, from the fall of Rome until the rise of the Renaissance city states of northern Italy (Florence, Siena, Venice).

The Renaissance is nested within the Middle Ages (Medieval period) – the Middle Ages is often connected by historians with the Dark Ages, which, in my mind, is erroneous -- the Middle Ages being, as a Time location, Dawn or Spring, and the historical reflection of the Middle Principle I discussed earlier in Chapter One. The Middle Ages are the Dawn, in one aspect (light rising out of darkness), wherein the forces of Light and Darkness are balanced in terms of strength, where the world-view unites the opposites, unites, for example, the Religious and the Scientific perspective, the Female and the Male perspective of reality.. There two principles are ‘united’ in certain individuals – but they are also locked in deadly battle. If one views nature, Spring is the season of a ferocious battle between the new idea (in this case, Reason rising) and the old idea, the darkness (in this case Religion falling).

The human race, from here, will move in to the Age of Reason, or the glorification of the human intellect – leaving behind the ‘mystery’ of nature, the darkness of the clouded female mystery, taking this development to the pathological stage (repression and ridicule of the ‘mystery of nature’ as insane or superstitious) at Noon, precedent to man’s fall.

‘Renaissance Men’, the great artists/scientists of the Medieval era, are symbols of the complete man, uniting Light and Darkness, Male and Female, Reason and Dream, Mathematics and Art or Poetry. In historical manifestation, this temporary balance is lost. During the deep part of the Day Cycle, Science, Technics, the Male Mind, dominates; and during the deep part of the Night Cycle, Religion, Poetry, the Female Mind, dominates.

In my system, there are two Middle Age periods: the Dawn and the Dusk. At the Dawn, the Artist joins the side of Science, rational enlightenment (the light of the object), man, humanism, city-building, drawing away from the Religious world-view. At Dawn, the Artist is supported by the rich classes. At Dawn, the Renaissance Man supports the rich classes, supports the building of the city, supports the separation of the light and the dark. (City-building, raising the edifice, the monument of civilization, is a symbol of the male erection, raised up out of dormancy, a magic wand by which Nature becomes fecund, prosperous, matter filled with light.)

At the Dusk, the Artist essentially re-joins the side of Religion, mysticism, Nature, turning his back on the city as a den of iniquity, turning away from Science (which now seems sterile), turning away from Materialism (which now seems empty), turning away from the abstract Father and back toward the Natural Mother. At Dusk, the Artist is hated by the rich, and hates the rich in return. The hero at Dawn becomes the Anti-Hero at Dusk, the Revolutionary. The Angel of Creation at Dawn becomes the Daemon of Destruction at Dusk, enemy of the existing power structure. The religion that the Romantic Anti-Hero (as Prophet) joins is not the orthodox old religion of the establishment that he has created (under an earlier persona, guise, or mask), but the mystical dark religion of Death, the kabbalistic hidden magic religion of depth, the Wisdom Religion. Sterile orthodox literal religion cannot engender re-birth of the soul. It oversees the death of the soul, freezing the soul with reason. It is only the Living God, found on the mountain in darkness, which can resurrect the soul to a new life.

We remember that the ‘romantic’ idealizes and moves toward an Ideal through the power of love, away from a corrupted ideal which he no longer trusts or values. The Spring-Time Renaissance-Man’s love for the Earth in her virginal spring flowers and pure scents becomes, in Autumn, the Romantic-Man’s rejection of a corrupt Earth, in her colorful fallen leaves and fully-born fruits and bounty, an Earth used-up, in a sense, past her youth. As beautiful as the New Earth was to the Renaissance Man of Spring, the Old Earth is a corrupt and as disturbing to the Romantic Man of Autumn – and he looks to a new woman for inspiration, the Moon, the White Woman, for a love that is not Earthy, for a love that is emotional and spiritual and less material.

The De-Naissance Man of Dusk is, at one stage, a romantic anti-religious revolutionary, a Marxist. As he goes deeper into his solitude, he will leave behind this secular rebellion (which is a final form of materialism) and re-enter the water element and experience what Oswald Spengler calls the ‘second religion’, a re-birth of wonder at life’s richness (found in deprivation, darkness, and a re-discovery of primitive Nature, and his Non-Self), a personal reawakening of the genuine religious experience.

In Hinduism, Vishnu takes three steps across the universe. There are many meanings to this three steps Vishnu takes. One meaning is the description of human life as (1) Religious Life, in which the human believes in God as he is told to do by his parents (this is the childhood of the man); (2) Anti-Religious Life, in which the man rebels against the instructions of his parents, individualizes, resists the common perceptions (this is the adolescence of the man); and (3) the Second Religious Life, in which a man synthesizes the oppositions (establishment and anti-establishment, culture and counter-culture), and sees God with his mind and heart fused – seeing God’s Mind through Nature’s Laws -- as he saw God in the first stage only with his heart, only with his faith.

The loci of the Dawn is in mercantile City-States, rising up out of Nature’s dark water. The loci of the Noon is urban, the city, the megalopolis. The loci of the Dusk is the academic City-States (university towns), where the ‘back to nature movements’ are born and bred, and where the Counter-Culture thrives. The loci of Midnight is the Earth, the soil, the land, where the roots are found; where Gothic nature builds great monumental churches to God, a philosophy, a theology, that is written in stone.

It is possible for a man to feel gigantic in the City. It is not possible for a man to feel gigantic in Nature. This tells us something about the Ego of the human, and the illusions between which “Man” moves.

The Renaissance Artist symbolizes the Dawn, the growth of Culture. Julius Caesar and the Roman Legions symbolize the Noon-Time, with its Neo-Classicism. The Romantic Artist symbolizes the Dusk, the growth of the Counter-Culture (the decay of Culture), and with its two paths, Marxist rebellion and Mystical Death and regeneration. Both of these paths romanticize martyrdom. Jesus Christ and his Gnostic and then his Gothic followers symbolize the time of Midnight, with its Mysticism. The Renaissance Man marries Religion, Science, and Art. The Romantic Man divorces Science from Religion and Religion from Art and marries himself to the poor, generating Democracy, first, then a more totalitarian proletariat government, then a rejection of life entirely and an embrace of death with leads to either suicide or spiritual rebirth.

Theocracy is born at Midnight, with the rebirth of the Religious Idea. The Aristocracy appears, first, as the military arm of the Church. But, over time, the Aristocracy grows weary of the tyranny of the Priesthood. The Aristocracy rebels against the Church, creating a feudalistic Spring Season in human culture. The Romantic Aristocracy rebels against the Renaissance Aristocracy, bringing a republican Summer Season to human culture (Dionysus kills Apollo; Tammuz is gored by the bull in June). It is this Summer-to-Autumn season that sees the creative fruition of the human plant in the form of individual talent on its largest scale (in the form of freedom and equality, symbolized by the astrological sign of Libra). We will note that Dawn and the Dusk are times of great artistic and philosophical ferment. In the Democratic Era, the greatest human freedom occurs – and this corresponds to the harvest season, the culmination of the seed of human culture planted back during the darkness.

The Romantic, leading the Middle Class, rebels against the corrupt Aristocracy and joins the Working Class to create the great Democratic Era. The Working Class ultimately rebels against the Middle Class to bring about the Winter era (the Marxist era?) of Chaos and sterility. Greater freedom, in each case -- freedom from God's Law, freedom from Natural Law, freedom from Society's Laws -- leads, eventually, to a state of Chaos, an age in which each individual seeks to live by laws that he or she creates. The health of the group, the strength of tradition, weakens as the strength of the individual grows. When the society has destroyed itself through freedom, and has indulged itself in chaos and darkness, it returns to God; and a new form of Theocracy rises when the Working/Peasant Class allies itself with the Church seeking order.

The Romantic anti-hero at Autumn rebels against academic technique as much as the Renaissance Man of Spring let himself be defined by the precisions of academic technique.

The Renaissance Man (the Dawn) is a figure of balance between the two forces of Light and Darkness, as is the Romantic Man (the Dusk), each standing with one foot in light and one foot in darkness. The Renaissance Man is moving toward an imbalance of enlightened reason (Scientific thought) which leads to a kind of apocalypse; the Romantic Man is moving, instead, toward an imbalance of unenlightened reason (Metaphysical thought) which also leads to a kind of apocalypse.

The Materialistic apocalypse is experienced at Noon, and this is why so many Noon-Cycles erupt into economic depressions.

The Religious apocalypse is experienced in Midnight-Cycles – recent religious apocalypses include the murder-suicide binge led by Jim Jones of the People’s Temple, in Guyana (with nearly 1,000 church members poisoned by their leader, who then committed suicide) and the spectacle of disillusioned American and European middle-class children joining the religious commune in central Oregon led by Osho (Bagwan Shree Rajneesh) an Indian Guru who proclaimed the following as part of his religious doctrine: ‘Sex is fun; Materialism is good; and Jesus was a madman.” Osho owned 93 Rolls Royce cars, while his followers live in relative poverty. He had sex with many of his followers; and several leaders of his cult were arrested when they intentionally spread salmonella food-poisoning in ten local restaurants, sickening more than 750 residents of the Dalles, Oregon, in an attempt to take over city government by diminishing voter turnout during the 1984 voting season. Followers were also arrested on conspiracy to commit murder changes for plotting the murder of a United States Attorney. (Osho was also a very open anti-semite, one of his favorite sayings being: “I will have to wash my mouth out; for I have just eaten a Jew.’)

Too much reason is a form of ‘Noon-Madness’, rendering life arid and sterile; and not enough reason is a form of ‘Midnight Madness’, turning life in to a flood of emotion, a death by drowning, or, in historical epochs, death by ice.

Dusk 1974

1978 – Jim Jones People’s Temple Mass Suicide, Guyana

1981 – Establishment of Rajneeshpuram in Oregon.

Midnight 1983

It is not only religious apocalypses that occur at Midnight, but also secular horrors.

Dusk 1938

1939 – Nazis invade Poland, starting World War II

1941 – Japan bombs American fleet at Pearl Harbor

1943 – Auschwitz main Nazi extermination camp

1945 – Atomic bomb dropped on Japanese cities

Hiroshima and Nagasaki by Americans

Midnight 1947

Also

Dusk 1974

1975 Khmer Rouge takes power in Cambodia

1979 Khmer Rouge genocide ends; up to two million Cambodians

killed

Midnight 1983

The above is all painted in rather broad strokes. I do not intend to fully elaborate this view in this book, since it is quite intricate and will need much development. This book presents a blueprint of ideas, with a primary focusing on the Great Tribulation now facing the Earth as we slip in to the Night-Cycle (the Waking-Dream Deflation) The Day-Cycle is the Waking Dream and the Night-Cycle is the Sleeping-Dream.

A few more basic premises. The Summer/Noon represents a peaking of economic cycles; and a fall, as the future essentially contracts and darkens when the Sun-Hero, the Ego, is wounded; internal strife, war and civil war, rebellion of the Son against the Father Force (the Sky), economic panics, are all part of this declining Summer Season. Winter/Midnight represents the bottoming of an economic death, the slow rising of Masculine Spirit again after a period of Darkness.

The Female element (the Dark Brother, the Pessimist, The Loner, The Loser, the Revolutionary, in some myths, the one who kills or wounds the Sun) begins to win in the Summer/Noon, gains strength through the Autumn/Dusk and Winter/Midnight; and her/his strength is absolutely broken in the Spring/Dawn when the new-born Sun-Hero wars with the darkness, ultimately driving the Night (the Storm Gods/Clouds) out of heaven, back in to the Deep Darkness below (the Primordial Ocean).

Michael the Archangel is Judeo-Christianity’s new-born Sun-Hero, on one level, who drives Satan out of Heaven and chains him in the underworld. In fact, the myth of the rising Sun-Hero marries the figures of Jesus Christ and Michael the Archangel. Jesus Christ is Michael the Archangel when he is an angel in Heaven; Michael the Archangel is Jesus Christ when he is a man on Earth. We will look at this more later.)

Another way of looking at this duality is that of Private versus Public activity. The Private activity corresponds to the Day-Cycle, the Ego-driven cycle, where each private individual is allowed to pursue his/her fortune at the expense of everything else. The Public activity corresponds to the Night-Cycle, when the Private Enterprise (the male private parts, in keeping with the earlier metaphor of the Circle and the Circle’s Diameter) is re-absorbed back in to the whole. During the Public activity phase, the individual is often not allowed to pursue private dreams, as the survival of the whole is put to the test. Wars, financial crises, political and social dislocation, are often a part of this picture.

During the Day-Cycle, the emphasis is upon the Private Sector providing opportunities for citizens. During the Night-Cycle, the emphasis shifts to the Public Sector. (Some Business Culture voices claim that the Public Sector causes the economic depression. This is pretty clearly not so. As we can see in our most recent and continuing financial debacle, excesses of the Business Culture have brought the economy to its knees. This was also true in 1929. The Public Sector Culture (liberalism) tries to respond to the condition in which it finds itself. Simply cheerleading Business will not work; lowering interest rates will not work, especially when citizens are already over-leveraged and worried about bankruptcy and loss of jobs. Hunkering down, saving money, self-protection, becomes the order of the day.

I am aware of the paradox of this private-public dichotomy. During the Day-Cycle, the private man works in the public sphere (the external world); and during the Night-Cycle, the public man works in the private sphere (the internal world). During the Day-Cycle, the public man appears from his house to perform rituals of social service and exploitation; during the Night-Cycle, the pubic man disappears back in to his private residence in order to refresh himself from the stress of his public life. As he dreams he journeys back into his dream world, which is, paradoxically, both private (composed of individual wishes and fears) and public at the same time (when viewed as Jung’s Collective Unconscious).

Jung’s Self is a paradox, a unity of opposites. So we should not be surprised to see this paradox being the primary law of nature. Splitting the whole into parts precedes and defines the process of incarnation and life; fusing the parts into the whole again defines the process of pralaya, the period of rest subsequent and precedent to incarnation or Day-Cycle activity.

This is why economic protectionism is inevitable. Historians argue that protectionism caused the Great Depression in the 1930’s. This notion is silly. Protectionism is not a cause but an effect. The contraction causes world concerns to shrink back to the local. Each nation begins to put its own citizens first, instead of just its business executives. Globalism (the expansion of capitalism’s open markets) becomes moot. Open markets shrink back toward the center – this is what contraction means. Competition between nations for economic survival generates animosities and conflicts that often lead to outright warfare.

Does protectionism makes the situation worse? Perhaps. Perhaps that is the wrong question to ask. Perhaps we should ask if the recovery of the deflated Ego of the culture is possible without a phase of protectionism. If the life-instinct is dependent upon a threat to life in order to experience resurrection, then perhaps nationalism/protectionism cannot be avoided, even if it does a disservice to the profits of multi-national corporations in the short-term. We will look at this phenomenon more completely later when we devote a chapter to the process of protectionism. We will also note that the term ‘Romantic Nationalism’, used to describe a kind of art movement in Eighteenth Century Europe, also describes an historical process as the Tree of Life moves back toward its folk-component, its soil, and its roots. As the world becomes increasingly dark, it also becomes increasingly ‘national’ as opposed to ‘international’ during the periods of enlightenment.

The worship of wealth (which is a form of body-worship) is not the only value that defines a culture and a people. What really defines a people is how they respond to adversity, much more than how they respond to prosperity.

In one sense we have already looked at a microcosmic scale of this organic whole in historical manifestation. The Renaissance is the Spring; the Empire is the Summer; the Fall is the Autumn; and Rebirth of the Sun Hero is the Winter. In any historical analysis, we should look for these symbols as being clues to the time-position of the historical manifestation.

In European (Roman) history, the Renaissance was clearly marked by the city-states of Italy: such historical figures of Michalengelo, Leonardo, Dante, Vico, Botticelli, the Medici, all mark this time as the time of Spring and rebirth.

We look for some form of political tyranny at Noon, absolute power wielded in the name of Empire. Napoleon comes to mind immediately. We know that there are cycles within cycles (Hitler appears as a German Noon-Symbol as well.) At Noon there is no shadow. (‘It’s all good.’) In other words, the shadow has been beaten down so badly as to appear almost non-existent. The loyal opposition has essentially come to agree with the masculine force of will so much so that there appears to be absolute unity in the country. (Or the opposition has been killed, driven underground, or driven into exile.)

The Noon is also a time of the tyranny of ideas, with Science being at its highest arc in the circle. Social Darwinism was emblematic of this tyranny of an idea: ‘the survival of the fittest’, the implication being that the people on top were the most skilled and most talented, the fittest of the human species, while those on the bottom were considered expendable failures of the human species. It is a short jump from this to the fascist racism which put white Aryans as the super-race or yellow Japanese as the direct descendants of the Sun-King, destined by the gods to ruthlessly dominate life on Earth.

Noon represents the apex of the expansion of the self-made man.

When we think of the Romantics of Europe, many names come up: Goethe, Beethoven, Nietzsche, Lord Byron, William Blake, Goya, Delacroix, Schubert, Liszt, Wagner, Turner, Constable, Friedrich, Shelley, Keats, Coleridge, Schiller, Novalis, Delacoix, Hugo. One thinks of Caspar David Friedrich’s ‘Wanderer Above the Sea of Fog’ is a symbol of this anti-heroic retreat from society, retreat into the subjective. There is a well-dressed (urban) man standing on a high peak, alone, in Nature, contemplating other high peaks.

The subject in the painting is essentially turning his back on man, on man’s creations, on the city, now viewed as corrupt beyond repair. He is going back to Nature. He is turning his back on human society and on objectivity, returning to the subjective reality, the dream, and the God hidden in the dream, in the soul.

The Hero protects clean and helpless society from the dangers of diabolical and criminal forces of nature. The Anti-Hero turns against an unclean, corrupting society, choosing the dangers of a life of solitary wandering as superior to the life of greed, decay and human decadence which the city has come to represent to the Anti-Hero. The Anti-Hero demonizes man and the city, idealizes Nature and the Primitive Life, much as the Hero demonizes Nature and idealizes man and man’s power to create. These two forces are essentially the same, but at a different time, and with a different perspective. The Dawn is pure and fresh, the light of illumination becoming more golden as it rises up out of the dark womb, Nature. The Dusk is dark, cold, jaded, used-up, the light of illumination becoming more saturnine as it sinks into the dark womb, Nature. (Many historians speak of the Romantic Era as the Counter-Enlightenment, a period of reaction against the age of deductive reasoning (Science), during which the ‘feminine’ mind-qualities of intuition, feeling, and imagination are once again discovered and elevated, having been demonized or ridicules during the period of masculine scientific will, or Enlightenment.)

The Hero at Dawn believes in the objective world, which comes more and more in to view as the Day expands. The Anti-Hero at Dusk believes in the subjective world, which comes more and more in to view as the Night expands (as the Day contracts).

Midnight, of course, is the time of Jesus Christ in Europe. From the cradle of the Moon, Jesus rises up out of the darkest night, becoming the Renaissance Man, Michaelangelo, becoming the Empiricist tyrant, Julius Caesar, becoming the Romantic ‘Sturm un Drang’ Rebel, Goethe, then re-becoming himself, the Scapegoat in Capricorn, the New Sun born in Capricorn, in the endless cycle, endlessly turning.

The implication here, apparently, is that the 2 becomes 4. This is a complication of the picture, at least in one sense. We have largely been talking about two forces in opposition. But these two forces are also dual, each with a dominant nature and each with its own shadow. We know these dominant natures as the circle and the circle’s diameter, the Darkness and the Manifested Light, the Feminine and the Masculine, the Womb and the Penis, the Zero and the One. But each force casts a shadow, each has a nature it keeps in the background, suppresses, attempts to diminish.

(This complication may seem to be an unnecessary digression here. But, since the idea of the Shadow implies a dominant principle, which implies a subordinate principle, a dominant principle that receives more light (and has a more substantial body, technology, of course, being an extension of the body), the idea of race is inherent in this concept. Race is an integral part of American history, as it is of world history. And clearly race is something that must be addressed as we speak about history’s sins and history’s redemptions. Also, with the apparent risings of fundamental Islam (I believe that is a redundancy at present) also raises issues of substance/shadow that will manifest and is manifesting on the historical stage today in a very dramatic fashion. It might be interesting to look at the Muslim phenomenon through this lens also, which we will do later.)

We re-begin, geometrically-speaking, in the Sea of Primordial Darkness, Night, Pralaya; then, at the appointed time, the 1, the Seed of Light, the Universe, appears and begins to expand. The 1 divides into 2 (Demiurgos). The 2, in opposition and cooperation (the paradox) create the 3 (the triangle), which, in reflecting itself in the world below, creates the 4 (the square).

This square is the essence of these two sets of opposites and their shadows, for the masculine force and its shadow are the Vertical Force (North and South), while the feminine force and its shadow are the Horizontal Force (East and West). Thus the cross is born, or illuminated, in its essence, as a totality.

(This diagram is drawn from the perspective of the West. I do not believe that the sun actually rises in the west and sets in the east. It is intended to represent a set of ideas focused in Western history only. The Southern perspective is the exact reverse of the Northern perspective. The Eastern perspective is the mirror image of the Western.)

The North’s shadow is the South; the South’s shadow is the North. The West’s shadow is the East; the East’s shadow is the West. (We must remember that the Sun, in its Day-Cycle, journeys East to West; and,, during its Night-Cycle, journeys West to East – in a boat or casket on the water. Hence, the myths of Nuah and Noah and Dagon and Gilgamesh and Osiris and Deucalion and Vaivasvata Manu and Jaik-Khan and Kezer-Tshingis and Lif and Noj and Pairekse and Schal-Jime and Utnapishtim all relater to the Flood, when the world is swallowed by Water or Darkness and the Night-Journey begins.)

These dynamisms make up the World Lotus in Eastern religious philosophy; and the Rosy Cross in Western religious thought.

In mythology, the Four Directions and Four Seasons are connected with the Four Elements (Air, Fire, Water and Earth), the Four Archangels, the Four Horsemen of the Apocalypse, the Four Rivers in Paradise, the Tetragrammaton (the Four Parts of the Sacred Names of Jehovah, YHVH), the Four Worlds of Kabbalism….all refer to material totality and solidity, completeness.

It is a short step, graphically speaking, from this rendering of the ‘four principles of nature’ to a much more modern (scientific) rendering of the same principles, with added secondary directions of Northwest, Northeast, Southeast and Southwest, a floral octagon structure.

In much the same way that the oak tree is implicit in the acorn, it might also be true that the planet (and the planetary life) is, itself, implicit in the material seed, the atom.

By the same token, the solar system may also be implicit in the atom, as prototypes repeat through large and small scales, and scales in-between.

CHAPTER SEVEN.

A LITERARY DIGRESSION

(Numbers and Structure in the Microcosm Seen Through the Lens of Melville’s Moby-Dick)

In his masterpiece Melville’s Moby-Dick – An American Nekyia, Edward Edinger writes about the symbolism of numbers, that reflect on the above, and also on what we wrote earlier about the ‘Three Steps of Vishnu’. Edinger writes in Chapter 14, ‘The Pact With the Devil’:

As the Pequod approaches the cruising ground where it is expected Moby-Dick will be found, Ahab has the blacksmith make him a special harpoon of the hardest steel to use against the white whale. For the final tempering, Ahab asks [his special] three harpooners for some of their blood, and into this he plunges the heated barbs:

‘Ego non baptizo te ill nominee patris, sed in nominee diaboli! [I baptize you not in the name of the father but in the name of the devil],’ deliciously howled Ahab, as the malignant iron scorchingly devoured the baptismal blood. [p. 532, chapter 113)

This ritual confirms what has been suspected all along, that Ahab’s pact with Fedallah is a pact with the devil. First of all, we note that Ahab does not use the full formula of Christian baptism. The complete ritual statement is ‘I baptize you in the name of the Father and the Son and the Holy Spirit.’ Ahab omits the reference to the son and the Holy Spirit. This suggests that his psychological state corresponds symbolically to the pre-Christian period. Ahab’s image of deity is the Old Testament Yahweh.

The Christian trinity of Father, Son and Holy Spirit is one of many threefold images symbolizing the developmental stage of psychic growth. The first three numbers have important psychological symbolism. Number one, as the first and original number, is not, strictly speaking, a number at all. One, us unity and totality, exists prior to the awareness of numbers, which requires a capacity to distinguish between separate, discrete entities. Thus, one corresponds symbolically to the original state of wholeness prior to creation and the separation of things.

Two is the first real number, since with it is born the possibility of discriminating one thing from another. Two symbolizes the act of creation, the emergence of the ego from the original state of unity. Two causes opposition; it represents a state of conflict. Three, however, is the sum of one and two, and unites them both within itself. It is the reconciling symbol that resolves the conflict state of two.

The three terms in the Christian trinity, considered as phases of psychic development, can be equated with the symbolical meanings of numbers one, two and three just presented. The Age of the Father (one) is the state of original oneness with life, without doubt or doubleness of mind. The Age of the Son (two) is a state of inner conflict in which the ego is separated from its original ground of being. It is a state of alienation which longs for redemption or salvation. The Age of the Holy Spirit (three) is the stage of reconciliation. The opposites Father and Son have been connected by a third, the Holy spirit, which provides reciprocal communication and a release from the irreconcilable conflict of opposites in stage two.

Ahab omits the Trinitarian formula of baptism because it does not correspond to his psychological state. He is in stage two, the state of conflict and alienation. He experiences himself as the Son of the Father who can maintain his identity only through defiance, by insisting that two exist, not just one. Like Job, Ahab is rebelling against the Age of the Father.

Edinger’s insights also take in the notion of the number 4.

The monomaniacal patriarchal figure of Moby-Dick is Ahab, the damaged and damned captain of the Pequod, a man who has lost one leg to Moby-Dick, the Great White Whale, and who has had his face, indeed his entire body, nearly cut in half during hand-to-hand combat with the monster – he has a long scar that neatly divides the left half of his face from the right half, in fact divides his body in half. Ahab is the titan, the giant, who is divided against himself. Ahab’s holy quest, and the whole purpose of his life now, is revenge on Moby-Dick. Moby-Dick represents to Ahab all the darkness in the world, all the madness of the world, all the violence of Nature and all the malevolence God had thrust upon Humanity, in the form of its mortality. ‘[Ahab] piled upon the whale's white hump the sum of all the general rage and hate felt by his whole race from Adam down…’

The soul element of Moby-Dick is the Son-aspect of the novel, Ishmael, who has taken his place on the Pequod out of boredom, alienation from city-life, and out of a longing for adventure.

In fact, Ahab is the Father-Figure who has risen from the balance, the Dawn, out of the ocean of non-being, to become the tyrannical Force of the King at Noon, the man divided against himself and also divided against the world, the builder of the Tower of Babel. Ishmael is the Son, the Dusk, the Anti-Hero, who has turned his back on the city, on civilization, and, ultimately, turned against the rule of the White Man, the emblem of this rule being Ahab, his symbolic father.

The whale-boat captain is an emblem of a guardian of civilization. Sperm oil from the whale lit the lanterns in the West during the 19^th Century, generating the light that defeated the darkness of Night. Ahab, in a symbolic sense, is a protector of civilization. He fights the dark monsters of the primordial ocean in deadly battle, with very real consequences, loss of limb and life, in order that the women and children on land (in the cities) can live with more comfort, and less fear during the Night.

Ishmael is the son in rebellion against civilization, in rebellion against the father figure. Ishmael is on the Pequod almost by accident. He has stumbled in to Ahab’s circle, without understanding the grimly serious nature of Ahab’s quest.

Ishmael, on the first night of his adventure, shares a bed with Queequeg, a huge terrifying primordial dark-skinned ‘savage’, with tattoos all over his body. A pagan; a devil, in the eyes of most Christians at the time.

Jung writes, as if describing Ishmael (and as if describing the Romantic Anti-Hero as a class, the Autumn Middle-Age types, who turn their backs on the orthodox rules of the city and civilization):

There have always been people who, not satisfied with the dominants of conscious life, set forth – under cover and by devious routes, to their destruction or salvation – to seek direct experience of the eternal roots, and, following the lure of the restless unconscious psyche, find themselves in the wilderness where, like Jesus, they come up against the son of darkness… Thus an old alchemist prays: ‘Purge the horrible darkness of our mind, light a light for our senses.’ The author of this sentence must have been undergoing the experience of nigredo, the first stage of the work, which was felt as ‘melancholy’ in alchemy and corresponds to the encounter with the shadow in psychology.

Queequeg is Ishmael’s shadow. Ishmael is the West; Queequeg is the East. Ishmael is Civilization; Queequeg is Nature. Ishmael is alienated Consciousness; Queequeg is the original unconscious state, at home in Nature, at home with life’s paradoxes. Queequeg is the dark ‘Natural Man’, the shadow the white man both fears and admires, both despises and secretly envies.

Edinger writes:

Ishmael first meets the savage harpooner in chapter 3 and is frightened by the alien appearance, his strangely tattooed skin and his pagan religious ritual. He is the very opposite of Ismael’s civilized, Christian consciousness. Characteristically, Ishmael expects to be attacked by Queequeg. The ego usually assumes the shadow has a hostile intent. This is a projection. The ego feels hostile toward the shadow and expects hostility in return, which, under the circumstances, is quite likely. As a rule, the unconscious shows the ego the same face that the ego shows to it….

After sharing Queequeg’s bed for the night, Ishmael reawakens next morning in the heavy embrace of the dark man’s arms, ‘This arm of his tattooed all over with an interminable Cretan labyrinth of a figure…’ Later this same association with the labyrinth of the Minotaur in the myth of Theseus appears in a description of the [inside of the] whale, ‘supplied with a remarkable involved Cretan labyrinth of vermicelli-like vessels…’

One thinks immediately of the biblical story of Jonah, who was swallowed by a whale, and who lived inside the whale for three days, before being safely deposited on land again, after a period of death-instruction, or pralaya. It is my thesis that America’s (America being an emblem of the Sun-Hero) fall from power through the recently-begun financial collapse is essentially entering the whale again, and must undergo an initiation into death, into the images of failure, self-hate, self-reproach, very similar to the biblical imprisonment of Jonah in the belly (lower regions) of the whale (the king of the ocean). We will remember that Jonah was commanded by God to preach the end of the world to a corrupt Ninevah, a command Jonah feared and attempted to escape, by sea. Jonah, on-board his own version of the Pequod, was thrown overboard when the crew considered him a pariah; he was then swallowed by the whale and initiated into the secrets of God’s laws.

America, too, will be initiated into the secrets of God’s laws, as will the whole world. We remember the biblical doctrine: ‘It is easier for a camel to pass through the eye of a needle than for a rich man to pass into heaven.’ A rich society has no need of God. A rich society is God, is bigger than God; and this leads to the sin of pride, which leads to the fall, which leads to the re-discovery of God. A man must be small to pass through the eye of a needle.

We will find, also, that the Night-Cycle world we are entering is like a labyrinth, a structure in which only a small extent can be seen at any one time. During the Day, the eyes can see for miles. But during the Night, the eyes become much less useful. Vision is reduced dramatically. The labyrinth implies a prison for the senses, an experience of loss, many stops and many false starts, a reality for which a map is needed in order to ensure progress. Metascience, of course, religious, scriptural writing, the symbolic language, is the map tht has been prepared for humanity to help them survive the test of the labyrinth, which is built in to the system as the Night-Cycle experience, the experience that re-awakens the presence of God is society.

Edinger continues:

The labyrinth or the maze is a symbol of the unconscious, particularly its dangerous aspect, which threatens confusion and disorientation. Theseus could dare to enter it only with the orientation of Ariadne’s helpful thread. Ariadne is an anima figure; her thread signifies a connecting link between the ego (Theseus) and the anima, or feeling life. In the Cretan labyrinth lived a masculine monster, the Minotaur, representing undifferentiated male instinctuality. The myth suggests that one may dare to confront one’s unregenerate lust and power urge only when holding on to the guiding thread [Sutratma in Hinduism] of human feeling-relatedness, which gives orientation and prevents dismemberment and dissolution in the chaos of instinctive drives. If Queequeg is the labyrinth, he is also an Ariadne. As we shall see shortly, he evokes in Ishmael a capacity for love and human feeling, which will redeem him, and, ultimately, save him from the catastrophe of the Pequod’s voyage.

So Queequeg, the primitive, is Ishmael’s shadow; but he is more than a personal shadow; hhis roots go deep. He is a piece of primeval nature itself, a personification of thee original Whole Man [Adam Kadmon] at home with nature and himself. A close, indeed, inseparable relationship quickly develops between Ishmael and Queequeg. This is the theme of the primitive brother or friend, the hero’s necessary counterpart, who provides [the hero] with a certain balance. For instance, in the Epic of Gilgamesh, the dark brother Enkidu helps the hero to overcome the cosmic bull.

The wholeness Queequeg embodies is alluded to by the fact that he has black squares [the four] tattooed on his body and that his mark is the Maltese cross [the four]. Many other descriptive passages about Queequeg indicate this wholeness. He had a ‘certain lofty bearing’ and ‘looked like a man who had never had a creditor’….

Queequeg is the ‘noble savage’. Ishmael speaks about Queequeg:

Savages are strange beings; at times you do not know exactly how to take them. At first they are overawing; their calm self-collectedness of simplicity seems a Socratic wisdom. I had noticed also that Queequeg never consorted at all, or but very little, with the other seamen in the inn. He made no advances whatever; appeared to have no desire to enlarge the circle of his acquaintances. All this struck me as mighty singular; yet, upon second thoughts, there was something almost sublime in it. Here was a man some twenty thousand miles from home, by the way of Cape Horn, that is --which was the only way he could get there --thrown among people as strange to him as though he were in the planet Jupiter; and yet he seemed entirely at his ease; preserving the utmost serenity; content with his own companionship; always equal to himself. Surely this was a touch of fine philosophy; though no doubt he had never heard there was such a thing as that. But, perhaps, to be true philosophers, we mortals should not be conscious of so living or so striving. So soon as I hear that such or such a man gives himself out for a philosopher, I conclude that, like the dyspeptic old woman, he must have broken his digester. As I sat there in that now lonely room; the fire burning low, in that mild stage when, after its first

intensity has warmed the air, it then only glows to be looked at; the evening shades and phantoms gathering round the casements, and peering in upon us silent, solitary twain; the storm booming without in solemn swells; I began to be sensible of strange feelings. I felt a melting in me. No more my splintered heart and maddened hand were turned against the wolfish world. This soothing savage had redeemed it. There he sat, his very

indifference speaking a nature in which there lurked no civilized hypocrisies and bland deceits. Wild he was; a very sight of sights to see; yet I began to feel myself mysteriously drawn towards him. And those same things that would have repelled most others, they were the very magnets that thus drew me. I'll try a pagan friend, thought I, since Christian kindness has proved but hollow courtesy. I drew my bench near him, and made some friendly signs and hints, doing my best to talk with him meanwhile….

As Edinger points out, Ishmael is saved from his sense of isolation and shame by his association with Queequeg. Edinger writes: ‘Ishmael has been redeemed from his initial state of alienation through his encounter with Queequeg, who is a composite of Shadow and Self. The [alchemical] ‘melting’ within [Ishmael] indicates that a reconnection with the Self is accompanied by an awakened capacity to love.’

We know a few things about Queequeg: he is the native of a primitive south sea island, the son of a king, a royal man who risked his life to cross a great ocean to visit the West and see first-hand the glories of civilization.

Queequeg needs the civilization that Ishmael rejects.

Edinger writes:

[Queequeg’s] urgent need to make contact with civilization is important. It represents the striving of the shadow for consciousness. Queequeg’s heroic efforts to go to sea [he stowed away on a visiting whaleboat, resisted threats to throw him overboard, pleaded with the captain for a chance to visit Christendom] and learn about the white man’s civilization is a movement in the unconscious reciprocal to the depressive escapism which sent Ishmael to sea. It is as though Ego and Shadow were running toward each other from their appointed positions. Ishmael leaves his sterile life on land, Queequeg leaves his primitive, unconscious island paradise, each in search of the other.

The Shadow’s striving for admission to consciousness is a common theme in psychotherapy. It is often represented in dreams by primitive or uncouth figures who are attempting to break into a house. Such dreams, like Queequeg’s urge to visit civilization, indicate the shadow’s urge to participate and realize itself in consciousness. The Shadow carries aspects of the personality rejected by the Ego because they do not fit its ideal self-image. The Shadow is, thus, branded as inferior and unacceptable. At a certain point in development, psychological growth cannot proceed until this attitude is change, and the Shadow is welcomed in to consciousness. Queequeg must leave his unconscious paradise isle and be accepted at the conscious level if the capacities he represents are to be realized in actual life.

The electoral victory of Barak Obama, for many reasons, but for this reason also, marks a victory in the psychic struggle in America for wholeness, for healing, after many centuries of racial warfare, and of a divided psychic nature – the American political process has opened up enough to allow the Shadow full participation in the mechanism of civilization. Of course, there remain many elements of white-only conservatism that want, again, to exile the Shadow back to the bottom of the society. Fundamental Christianity, which connects dark skin with dark virtue (evil), another half truth, prepares always for a regeneration of a religious hierarchical order placing the white race in heaven – the northern hemisphere -- (and in control of Earthly society) and the black race in hell --the southern hemisphere.

Edinger continues:

It is by no means easy to accept the Shadow. It usually involves facing one’s most serious weaknesses and fears. It is commonly thought that the acceptance of a weakness gives it a reality that it would not otherwise have. The Ego operates on the false assumption that it can decide which aspects fot he psyche may be permitted existence. Acceptance of a weakness is equated with the condoning of it; that is, the Ego acts as a judge which approves or condemns various wholeness of the personality. This is the repressive attitude which split the original wholeness of the psyche and created the Shadow in the first place. However, for the adult, the psyche, in all its aspects, is a given fact. Since it exists and has its effects, whether consciously accepted or not, it is greatly to the individual’s advantage to be conscious rather than unconscious of his or her own reality.

After Ishmael gets over his initial horror at the prospect of sleeping with a savage, he sees Queequeg chiefly in positive terms. This is commonly the effect of facing the Shadow; it turns positive, at least in part. In addition, Ishmael represents an Ego which is acutely ware of its own inadequacies. In such a case, much of the potential strength of the personality sinks into the unconscious, where it is carried by the Shadow, making this figure more positive. We then speak of a Positive Shadow. Queequeg is such a Positive Shadow, carrying major strength and assets as yet unrealized by consciousness. His positive character is particularly evident in the prominent masculine attributes he embodies [and which Ishmael lacks]. In contrast to Ishmael, who is moody, depressive and subject to regressive tendencies, Queequeg is full of strength, dignity and purposefulness, a harpooner who has his harpoon with him constantly: ‘That barbed iron was in lieu of a scepter now…’

The harpoon, as a variant of the spear [and scepter], belongs to the whole body of masculine libido symbols – sword, arrow, ray, phallus, staff, torch, etc. Those images all refer to the masculine principle which, on the instinctive level, is manifested by aggressive, self-asserting power and, on the psychological level, by initiative, disciplined purposefulness, penetrating, discriminating rationality, and the clarifying, creative power of the Logos. The figure of Queequeg carries these capacities in a primitive, undifferentiated form.

Ishmael is the West traveling to the East; Queequeg is the East traveling to the West. Ishmael is seeking to become Primitive and Whole again, in Nature; Queequeg is seeking to become a man of civilization, a man of the City, a man of Light and Reason.

Ahab also has a Shadow. His name is Fedallah. Ahab is High Noon, a man of Law, fighting the outlaw nature of the White Whale. No one on the Pequod can stand up to Ahab. Ahab’s Shadow is not even seen at first, because he is kept hidden in the Pequod until the boat has sailed and the calling has been announced and clarified.

I have written that Alan Greenspan is America’s most recent Ahab, and that his ‘sin’ is his inflated nature, his pride: he came to believe that he was God. Therefore he was setting himself up to be overthrown by God, thrown out of Eden (he ate the forbidden fruit so that he could become as powerful as God), cast into death and darkness and labor (‘labor’, in this instance, constituting at least a dual meaning: work and a symbolic maternal pain of re-birth).

Alan Greenspan is not the only Ahab in America at this moment. But he was the leader (in many ways more a leader, longer, than George Bush) of the expanding Ego in America, the inflated state of America. His nickname ‘the Maestro’ indicates the level to which his Ego had been elevated by friends and colleagues. The Maestro. The Genius. The Fuhrer. The Man Without a Shadow. The Man Who Walks On Water. The Sun-King. The Magnificent. With his staff, the Sceptre, the new Pope of modern global capitalism, King Alan, brought wealth and health and happiness to common people all over the globe. With his finger on the magic button, he could expand or contract the world economy at will, simply by inflation or deflating the wonderful Credit Machine (note: he did much more inflating than he did deflating). He was a mountain of a man. A man from the mountain.

And, like Ahab, none of his crew on the Pequod questioned his judgment, even those who tacitly understood that his policies would lead to the eventual destruction of the Pequod, of home and hearth, of city and industry.

As the death-voyage begins, Ahab appears with his officers and crew on the deck of the Pequod, and hammers a gold coin, a doubloon, to the main mast and announces that the first crew-member to sight Moby-Dick will receive the coin as a reward. The coin, a circle, represents the whale, the Self, the Earth, and the Zodiac in the heavens above, connecting Ahab to God and to the Devil through the White Whale.

Edinger writes:

The circular golden doubloon is a mandala, and, hence, an image of the Self. It is stated that the doubloon is ‘the white whale’s talisman’, thereby establishing an organic connection between the symbolic meaning of the coin and that of the whale. This provides added evidence for the conclusion previously reached that the white whale is a symbol of the Self…. On the coin is seen:

the likeness of three Andes’ summits; from one a flame; a tower on another; on the third a crowing cock; while arching over all was a segment of the partitioned zodiac; the signs all marked with their usual cabalistics, and the keystone sun entering the equinoctial point at Libra…

Libra, of course, marks Ishmael’s point on the Wheel of Life, the Autumn, and the first point in the Underwater journey, from which point the dark quarter of the Winter is begun to be experienced. Libra is the balance; but the balance is about to be lost, plunging the entire crew of the Pequod into the confrontation with Nature’s darkness. Officers and mates and crew approach the coin, consider it, and illustrate their own reaction to the talisman and to the God the object represents symbolically.

Edinger writes:

The zodiac is, itself, a mandala Self-image projected on the heavens and divided into the twelve archetypal zones or houses. Within this zodiacal circle on the coin there are three mountains. Mountains have always represented the abode of the sky or spirit gods, and the place where man and God meet [Moses on Sinai, for instance]. The Cosmic Mountain occupies the Center of the world, and, hence, is called the World Navel. The number three suggests the masculine trinity; and the other images reinforce the masculine emphasis: Fire, tower, cock and sun are all alternative expressions of the masculine spirit principle.

First to approach the coin is Ahab, who says:

There's something ever egotistical in mountain-tops and towers, and all other grand and lofty things; look here, -- three peaks as proud as Lucifer. The firm tower, that is Ahab; the volcano, that is Ahab; the courageous, the undaunted, and victorious fowl, that, too, is Ahab; all are Ahab; and this round gold is but the image of the rounder globe, which, like a magician's glass, to each and every man in turn but mirrors back his own mysterious self. Great pains, small gains for those who ask the world to solve them; it cannot solve itself. Methinks now this coined sun wears a ruddy face; but see! aye, he enters the sign of storms, the equinox! and but six months before he wheeled out of a former equinox at Aries! From storm to storm! So be it, then. Born in throes, 't is fit that man should live in pains and die in pangs! So be it, then! Here's stout stuff for woe to work on. So be it, then.

If we did not already know it, Ahab’s inflation would not stand revealed. [‘I’d strike the sun if it insulted me!’] He identifies himself with the three proud mountain peaks; the Ego is identified with the Self [the man believes he is God]. Such a psychic condition is, indeed, a stormy one; and, so, Ahab sees the storms to come.

Birth pangs and death pains Ahab associates with our Middle Ages – the astrological signs of Aries and Libra (the ‘time of storms’) – Dawn and Dusk – Spring and Autumn.

We will look more closely later at the significance of the Tower (and of the Twin Towers), as a symbol of Ego Inflation, Civilization, Male Power of Erection (Freud would probably smile) and the insinuated rise and decline of a civilization.

Ahab also has a shadow. But this Ahab-Fedallah unity is not the Positive Shadow, as in the case of the Ishmael-Queequeg unity. Judging from his name, Fed’allah is a Muslim. Dorothee Metlitsky Finkelstein writes in Melville’s Orienda that the name Fedallah is an Islamic compound from Feda, ‘sacrifice’, or ‘ransom’ and Allah, ‘God’. Fedallah, thus, means ‘the sacrifice of God’

Edinger shows that the cognate term Fedai means ‘he who offers up his life’. Fedai refers to a medieval sect of Islamic mystics who were also called the ‘Assassins’. Edinger writes:

These were avenging ministers or destroying angels of God who were pledged to commit murder in the service of Allah. The word ‘assassin’ derives from ‘hashish’, or ‘hemp’, the source of marijuana, and was applied to these religious killers because they consumed hashish in order to induce an ecstatic state of communion with the deity. These connections are most interesting in the light of Fedallah’s prophecy to Ahab that ‘hemp only can kill thee…’

Fedallah’s name, thus, suggests that he is the avenging agent of God, Fate’s assassin, sent to punish Ahab for his hubris. The weapon of assassination is hemp or hashish, which causes intoxication and loss of reason.

While it is not the hemp of hashish that ultimately kills Ahab – nor is it the hemp of the hangman’s noose, which Ahab ultimately fears – this hashish allusion is, indeed, food for thought, especially when considering the Romantic Counter-Culture’s love of hashish (the Dusk-Force) and its role in the temporal destruction of the ‘house that the father built’.

Finkelstein writes of the Fedai:

The Fedais or assassins were sent to all parts of the world on missions of assassination as a religious duty. They were distinguished by the determination with which they exposed their lives in order to destroy their victims, the voyages which they undertook to achieve their purpose, and the calmness with which they waited for the moment favorable to their design.

Fedallah is a kind of Judas, a traitor, sent to oversee the crucifixion of Ahab – a kind of Trojan Horse slipped on to the Pequod during cover of night, manifested onboard only after the ship has sailed.

As the horizontal axis (East-West) of the Ishmael-Queequeg unity represents a humanistic dualism – a polarization of human ideals -- the vertical axis (North-South) of the Ahab-Fedallah unity represents a religious dualism, the Christian at one pole and the Muslim at the other. The East-West duality is a smaller, daily cycle. The North-South duality is a much larger, yearly cycle, a millennial cycle. (In the classical idiom, there are 360 – or 365 to be more scientifically, less geometrically, accurate -- East-West duality cycles in every one North-South duality cycle.)

Fedallah pretends to be Ahab’s amiable shadow. In fact, he is present on the Pequod in order to carry out Allah’s fatwah (death-sentence) on Ahab. There is not a great difference between assassins like Fedallah who give their lives to assassinate enemies of Islam and suicide-bombers who do the same today or those who commandeer civilian planes and fly them into buildings as avenging angels of their God’s cry for vengeance.

Edinger writes:

Unknown to the others, Ahab had secretly brought on board the Pequod his own whaleboat crew with its leader, Fedallah. When whales were first sighted and the boats were being lowered, these strange stowaways suddenly make their appearance. ‘With a start all glared at dark Ahab, who was surrounded by five dusky phantoms that seemed fresh formed out of air.’ Fedallah, their leader, was the most striking one.

The figure that now stood by its bows was tall and swart, with one white tooth evilly protruding from its steel-like lips. A rumpled Chinese jacket of black cotton funereally invested him, with wide black trowsers of the same dark stuff. But strangely crowning his ebonness was a glistening white plaited turban, the living hair braided and coiled round and round upon his head. Less swart in aspect, the companions of this figure were of that vivid, tiger-yellow complexion peculiar to some of the aboriginal natives of the Manillas; --a race notorious for a certain diabolism of subtilty, and by some honest white mariners supposed to be the paid spies and secret confidential agents on the water of the devil, their lord, whose counting-room they suppose to be elsewhere. While yet the wondering ship's company were gazing upon these strangers, Ahab cried out to the white-turbaned old man at their head, All ready there, Fedallah? Ready, was the half-hissed reply. Lower away then; d'ye hear? shouting across the deck. Lower away there, I say. Such was the thunder of his voice, that spite of their amazement the men sprang over the rail; the sheaves whirled round in the blocks; with a wallow, the three boats dropped into the sea; while, with a dexterous, off-handed daring, unknown in any other vocation, the sailors, goat-like, leaped down the rolling ship's side into the tossed

boats below. Hardly had they pulled out from under the ship's lee, when a fourth keel, coming from the windward side, pulled round under the stern, and showed the five strangers rowing Ahab, who, standing erect in the stern, loudly hailed Starbuck, Stubb, and Flask, to spread themselves widely, so as to cover a large expanse of water. but with all their eyes again riveted upon the swart Fedallah and his crew, the inmates of the other boats obeyed not the command…

Fedallah’s hair coils like a snake; he hisses like a snake; his race is notorious for a certain diabolism of ‘subtilty’…a characteristic that also distinguished the biblical Satan. Swart (a word used three times in this passage to describe Fedallah) means ‘dirty’, ‘blackish’, ‘malignant’.

Edinger writes:

Fedallah is clearly related to the devil; if he is not the devil himself, at least he is one of his subordinates…. Stubb says of him: ‘I take that Fedallah to be the devil in disguise.’

Although it is not described with the same clarity, it is evident that Ahab’s relation to Fedallah has a certain infernal parallel to Ishmael’s relation to Queequeg. Just as Ishmael concluded a pact of eternal friendship with Queequeg, which had its external symbol in the monkey rope that connected them, so Ahab was in some way bound to Fedallah:

But be all this as it may, certain it is that while the subordinate phantoms soon found their place among the crew, though still as it were somehow distinct from them, yet that hair-turbaned Fedallah remained a muffled mystery to the last. Whence he came in a mannerly world like this, by what sort of unaccountable tie he soon evinced himself to be linked with Ahab's peculiar fortunes; nay, so far as to have some sort of a half-hinted influence; Heaven knows, but it might have been even authority over him; all this none knew. But one cannot sustain an indifferent air concerning Fedallah.

In addition, Fedallah carried for Ahab something of the same characteristics of primal natural man and original wholeness, as did Queequeg for Ishmael:

He was such a creature as civilized, domestic people in the temperate zone only see in their dreams, and that but dimly; but the like of whom now and then glide among the unchanging Asiatic communities, especially the Oriental isles to the east of the continent – those insulated, immemorial, unalterable countries, which even in these modern days still preserve much of the ghostly aboriginalness of earth's primal generations, when the memory of the first man was a distinct recollection, and all men his descendants, unknowing whence he came, eyed each other as real phantoms, and asked of the sun and the moon why they were created and to what end…

Just as Queequeg revealed his relation to the original wholeness of the Primordial Self by his square tattoos and his mark, a Maltese cross, so Fedallah’s similar meaning is indicated by his being associated with the ‘primal generations’ and with the ‘first-man’. The image of the primal man, the Anthropos, has been extensively described by Jung. It is a symbol of the Self, the integrated whole person. Totality and the union of opposites is also implied by Fedallah’s clothes, which combine the opposite colors [or non-colors] black and white. Queequeg and Fedallah, being part-personalities rooted in the unconscious, both carry intimations of the primal wholeness. They are the shadows respectively of Ishmael and Ahab. This is specifically stated at one point:

And Ahab chanced so to stand, that the Parsee occupied his shadow; while, if the Parsee’s shadow was there at all it seemed only to blend with, and lengthen Ahab’s.

Having noted the correspondences between Queequeg and Fedallah, we must also mention the differences. In a sense, they are a pair of opposites paralleling the opposite natures of their corresponding partners, Ishmael and Ahab. Queequeg is largely a positive figure, embodying strengths and fortitudes that complement the weakness of Ishmael. He represents the noble savage. Fedallah, on the other hand, is the diabolical savage. He conveys a sense of darkness and evil. He does not complement Ahab’s conscious sense of heroic strength by weakness the way Queequeg’s strength complements Ishmael’s weakness. (That particular shadow function is reserved by Pip [the tiny half-mad black cabin boy]. However, Fedallah’s evident moral inferiority does compensate Ahab’s conscious sense of nobility, just as Queequeg’s nobility compensates Ishmael’s ignoble escapism.

With the voyage well under way, we have, then, a pair of mutual assistance pacts, together making a quaternity. Ishmael is bound to Queequeg in mutual love; and Ahab is bound to Fedallah in their mutual quest for vengeance.

Edinger identifies the number 4 with the four psychic functions of human consciousness. The two primary modes of perception, which are validated by causality and rational, scientific thinking: (1) thinking; and (2) intution; and the two modes which have been devalued, or invalidated, by empirical reasoning: (3) sensation; and (4) feeling.

Edinger suggests that these four psychic functions are embodied in Ahab and his officers on the Pequod: Ahab, the captain, represents the dominant function: Thinking. First Mate Starbuck represents the auxiliary function: Intuition. Stubb is third in command, the Second Mate, and represents the Sensation function. Flask is the Third Mate; he represents the Feeling function.

An argument can be made, also, that these four psychic functions are embodied in our four emblems of totality, our earthly cross of axes: Ahab-Fedallah; Ishmael-Queequeg.

The human being who is able to manifest this quaternity, to discover in himself all four psychic functions, assigning none to the habitat of a psychic shadow-land down under, exhibits wholeness. Ahab is not interested in wholeness, however. He is not interested in well-adjusted, mundane existence. This is shown by his destruction of the ship’s quadrant near the end of the novel, which also represents a kind of quaterity of presence in the Now.

A ship is largely blind without a quadrant. By using a quadrant (the root of which means ‘the fourth part’), measuring the elevation of the sun, a seaman can determine a ship’s current placement on the earth, existing latitude. Ahab dismissed the usefulness of the quadrant since it can only tell him where he is now, not where he will be in the future (by implication, that it works only during the Day, with the Sun, and not during the Night: it has no ‘metaphysical’ vision).

Surprisingly, Ahab instructs the quadrant (in one of his many mad soliloquies) that man’s view was meant to be horizontal (East-West); that if God had expected man to be proud, gazing into the heavens – i.e., vertically oriented, a climber) -- he would have put man’s eyes in the top of his head. In this, Ahab is taking a step toward Ishmael, striking back at science, striking out at the limits and the isolation of the inflated king, the king who has climbed the Tree of Knowledge in Eden and who surely, one day, must fall back toward the earth.

Then Ahab smashes the quadrant on the ship’s deck, essentially choosing to be lost in the heavens, rather than to be ‘known’ on earth. Ahab knows he is not coming back.

Foolish toy! babies' plaything of haughty Admirals, and Commodores, and Captains; the world brags of thee, of thy cunning and might; but what after all canst thou do, but tell the poor, pitiful point, where thou thyself happenest to be on this wide planet, and the hand that holds thee: no! not one jot more! Thou canst not tell where one drop of water or one grain of sand will be to-morrow noon; and yet with thy impotence thou insultest the sun! Science! Curse thee, thou vain toy; and cursed be all the things that cast man's eyes aloft to that heaven, whose live vividness but scorches him, as these old eyes are even now scorched with thy light, O sun! Level by nature to this earth's horizon are the glances of man's eyes; not shot from the crown of his head, as if God had meant him to gaze on his firmament. Curse thee, thou quadrant! dashing it to the deck, no longer will I guide my earthly way by thee; the level ship's compass, and the level dead-reckoning, by log and by line; these shall conduct me, and show me my place on the sea. Aye, lighting from the boat to the deck, thus I trample on thee, thou paltry thing that feebly pointest on high; thus I split and destroy thee!

Ahab consults Fedallah (Ahab’s predeterministic prophet) as to the parameters of Ahab’s own fate. Fedallah promises Ahab success in his quest – and this can be read as a prophecy for America (‘the sound like the moaning in squadrons over [Lake] Asphaltites of unforgiven ghosts of Gomorrah’):

These last three [dead whales] were brought alongside ere nightfall; but the windward one could not be reached till morning; and the boat that had killed it lay by its side all night; and that boat was Ahab's. The waif-pole was thrust upright into the dead whale's spout-hole; and the lantern hanging from its top, cast a troubled flickering glare upon the black, glossy back, and far out upon the midnight waves, which gently chafed the whale's broad flank, like soft surf upon a beach.

Ahab and all his boat's crew seemed asleep but the Parsee [Fedallah]; who crouching in the bow, sat watching the sharks, that spectrally played round the whale, and tapped the light cedar planks with their tails. A sound like the moaning in squadrons over Asphaltites of unforgiven ghosts of Gomorrah, ran shuddering through the air.

Started from his slumbers, Ahab, face to face, saw the Parsee; and hooped round by the gloom of the night they seemed the last men in a flooded world. I have dreamed it again, said he. Of the hearses?

Have I not said, old man, that neither hearse nor coffin can be thine?

And who are hearsed that die on the sea?

But I said, old man, that ere thou couldst die on this voyage, two hearses must verily be seen by thee on the sea; the first not made by mortal hands; and the visible wood of the last one must be grown in America.

Aye, aye! a strange sight that, Parsee: -- a hearse and its plumes floating over the ocean with the waves for the pall-bearers. Ha! Such a sight we shall not soon see.

Believe it or not, thou canst not die till it be seen, old man. And what was that saying about thyself? Though it come to the last, I shall still go before thee thy pilot.

And when thou art so gone before --if that ever befall -- then ere I can follow, thou must still appear to me, to pilot me still? --Was it not so?

Well, then, did I believe all ye say, oh my pilot! I have here two pledges that I shall yet slay Moby Dick and survive it.

Take another pledge, old man, said the Parsee, as his eyes lighted up like fire-flies in the gloom, -- Hemp only can kill thee.

The gallows, ye mean. --I am immortal then, on land and on sea, cried Ahab, with a laugh of derision; -- Immortal on land and on sea!

Both were silent again, as one man. The grey dawn came on, and the slumbering crew arose from the boat's bottom, and ere noon the dead whale was brought to the ship.

Fedallah, as Ahab admits, is Ahab’s ‘pilot’, his leader – is the daemon driving Ahab’s soul. Ahab is the captain, the pilot, of the Pequod – however Fedallah is the ‘captain of Ahab’s soul’.

What is Ahab’s fate? What is Fedallah’s fate? The fates of each are fused.

Ahab pilots the Pequod to the ‘very latitude and longitude’ (the cross) at the equator at which point he first saw, and battled Moby-Dick and lost his leg to the monster. Sighting the whale, the crew of the Pequod undertakes the fighting of the Great Whale, which fighting continues for three days. On the first day of the fighting, Moby-Dick attack’s Ahab’s harpoon boat and destroys it. On the second day, the harpoon boats are again lowered; Ahab wounds the Great Whale; but the whale again attacks Ahab’s harpoon boat. Fedallah is trapped in the harpoon line, and is dragged overboard to his death in the deep.

Lashed round and round to the fish's back; pinioned in the turns upon turns in which, during the past night, the whale had reeled the involutions of the lines around him, the half torn body of the Parsee was seen; his sable raiment frayed to shreds; his distended eyes turned full upon old Ahab. The harpoon dropped from his hand. Befooled, befooled! --drawing in a long lean breath -- Aye, Parsee! I see thee again. --Aye, and thou goest before; and this, this then, is the hearse that thou didst promise. But I hold thee to the last letter of thy word. Where is the second hearse? Away, mates, to the ship! those boats are useless now; repair them if ye can in time, and return to me; if not, Ahab is enough to die --Down, men! the first thing that but offers to jump from this boat I stand in, that thing I harpoon.

Moby-Dick, the Great White Whale, is the first hearse, the only not built by mortal hands. This shall be Ahab’s hearse also, as he joins Fedallah the next day, carried by the whale into the deepest part of the sea. The whaling ship Pequod shall be the second hearse, built of American wood. And the hemp that kills Ahab shall be neither hashish nor the hangman’s cord, but the harpoon rope attached to Moby-Dick which catches Ahab about the neck and pulls him underwater, to a death similar to Fedallah, coiled about the body of the whale.

On the third day of battle (the biblical symbolism of ‘three days’ echoes throughout the Old and New Testaments), Ahab and his crew again battle the Great Whale. Moby-Dick, wounded, turns and attacks the Pequod, staving in the huge whaling ship,sinking the Pequod in a massive whirlpool, scattering crewman down into the sea.

In unrelentingly beautiful writing, Melville describes the scene:

From the ship's bows, nearly all the seamen now hung inactive; hammers, bits of plank, lances, and harpoons, mechanically retained in their hands, just as they had darted from their various employments; all their enchanted eyes intent upon the whale, which from side to side strangely vibrating his predestinating head, sent a broad band of overspreading semicircular foam before him as he rushed.

Retribution, swift vengeance, eternal malice were in his whole aspect, and spite of all

that mortal man could do, the solid white buttress of his forehead smote the ship's starboard bow, till men and timbers reeled. Some fell flat upon their faces. Like dislodged trucks, the heads of the harpooneers aloft shook on their bull-like necks. Through the breach, they heard the waters pour, as mountain torrents down a flume.

The ship! The hearse! --the second hearse! cried Ahab from the boat; its wood could only be American!

Diving beneath the settling ship, the whale ran quivering along its keel; but turning under water, swiftly shot to the surface again, far off the other bow, but within a few yards of Ahab's boat, where, for a time, he lay quiescent. I turn my body from the sun. What ho, Tashtego! Let me hear thy hammer. Oh! ye three unsurrendered spires of mine; thou uncracked keel; and only god-bullied hull; thou firm deck, and haughty helm, and Pole-pointed prow, --death-glorious ship! must ye then perish, and without me? Am I cut off from the last fond pride of meanest shipwrecked captains? Oh, lonely death on lonely life! Oh, now I feel my topmost greatness lies in my topmost grief. Ho, ho! from all your furthest bounds, pour ye now in, ye bold billows of my whole foregone life, and top this one piled comber of my death!

Towards thee I roll, thou all-destroying but unconquering whale; to the last I grapple with thee; from hell's heart I stab at thee; for hate's sake I spit my last breath at thee. Sink all coffins and all hearses to one common pool! and since neither can be mine, let me then tow to pieces, while still chasing thee, though tied to thee, thou damned whale! Thus, I give up the spear! The harpoon was darted; the stricken whale flew forward; with

igniting velocity the line ran through the groove; --ran foul. Ahab stooped to clear it; he did clear it; but the flying turn caught him round the neck, and voicelessly as Turkish mutes bowstring their victim, he was shot out of the boat, ere the crew knew he was gone. Next instant, the heavy eye-splice in the rope's final end flew out of the stark-empty tub, knocked down an oarsman, and smiting the sea, disappeared in its depths. For an instant,

the tranced boat's crew stood still; then turned. The ship? Great God, where is the ship? Soon they through dim, bewildering mediums saw her sidelong fading phantom, as in the gaseous Fata Morgana; only the uppermost masts out of water; while fixed by infatuation, or fidelity, or fate, to their once lofty perches, the pagan harpooneers still maintained their sinking lookouts on the sea.

And now, concentric circles seized the lone boat itself, and all its crew, and each floating oar, and every lance-pole, and spinning, animate and inanimate, all round and round in one vortex, carried the smallest chip of the Pequod out of sight. But as the last whelmings intermixingly poured themselves over the sunken head of the Indian at the mainmast, leaving a few inches of the erect spar yet visible, together with long streaming yards of the flag, which calmly undulated, with ironical coincidings, over the destroying billows they almost touched; --at that instant, a red arm and a hammer hovered backwardly uplifted in the open air, in the act of nailing the flag faster and yet faster to the subsiding spar. A sky-hawk that tauntingly had followed the main-truck downwards from its natural home among the stars, pecking at the flag, and incommoding Tashtego there; this bird now chanced to intercept its broad fluttering wing between the hammer and the wood; and simultaneously feeling that etherial thrill, the submerged savage beneath, in his death-gasp, kept his hammer frozen there; and so the bird of heaven, with archangelic shrieks, and his imperial beak thrust upwards, and his whole captive form folded in the flag of Ahab, went down with his ship, which, like Satan, would not sink to hell till she had dragged a living part of heaven along with her, and helmeted herself with it. Now small fowls flew screaming over the yet yawning gulf; a sullen white surf beat against its steep sides; then all collapsed, and the great shroud of the sea rolled on as it rolled five thousand years ago.

The rough, theological North-South alliance/opposition leads to death and sinks both the substance and its shadow into the deep waters of the Flood. The Sun-Hero goes down with the boat and begins a protracted journey through through the underworld which is represented in the Solar Hero myths of all ancient cultures.

In a very real sense, Ahab becomes Ishmael, Ishmael becomes Fedallah, Fedallah becomes Queequeg, and Queequeg becomes Ahab, as the wheel keeps turning, and Time keeps creating manifestations in line with the Law of Time.

What becomes of the East-West alliance/opposition, the humanistic duality of Ishmael/Queequeg?

Queequeg, earlier on the journey, certain of his own death, requests his coffin be prepared (a third hearse of sorts). When he recovers, he turns the coffin into his bed, carving primordial hieroglyphics into the wood of the casket as talismans similar to the tattoos Queequeg bears on his skin. Later, when the ship’s standard-buoy is lost, Queequeg’s coffin is caulked and sealed with pitch to ensure it will float, and is used as a substitute for the ship’s standard-buoy.

When Moby-Dick rams the Pequod, ship-mates are scattered overboard, all about the sea; they are all drawn into the Pequod’s spiral death-dance as the ship sinks out of sight pulling everything and everyone below in the whirlpool. Everyone but Ishmael. Alone among all the crew, Ishmael is thrown far from the Pequod, avoiding the grave concave centripetal pull of the dying ship as it goes under.

As the ship sinks to its southern limits, and all the men of the Pequod with her, Queequeg’s re-finished coffin (with its magical carved incantations), breaks free of its tether and pops again to the surface of the sea. Ishmael climbs aboard the coffin and floats atop the life-buoy, saved by Queequeg’s coffin, upon which he is discovered a day later by the whaling boat The Rachel.

According to Edinger, the Rachel connects to the biblical passage Jeremiah 31, promising the Jews a return from exile:

15 Thus says the Lord:

“A voice is heard in Ramah,


lamentation and bitter weeping.


Rachel is weeping for her children;


she refuses to be comforted for her children,


because they are no more.”

16 Thus says the Lord:


“Keep your voice from weeping,


and your eyes from tears,


for there is a reward for your work,
”

declares the Lord,


“and they shall come back from the land of the enemy.


17 There is hope for your future,
”

declares the Lord,


“and your children shall come back to their own country.”

Jeremiah 31 also contains God’s promise of a ‘new covenant’, a new ‘chosen’ status, and a new Day-Cycle expansion.

31 “Behold, the days are coming, declares the Lord, when I will make a new covenant with the house of Israel and the house of Judah, 32 not like the covenant that I made with their fathers on the day when I took them by the hand to bring them out of the land of Egypt, my covenant that they broke, though I was their husband, declares the Lord. 33 But this is the covenant that I will make with the house of Israel after those days, declares the Lord: I will put my law within them, and I will write it on their hearts. And I will be their God, and they shall be my people. 34 And no longer shall each one teach his neighbor and each his brother, saying, ‘Know the Lord,’ for they shall all know me, from the least of them to the greatest, declares the Lord. For I will forgive their iniquity, and I will remember their sin no more.”

Implicit in surviving the Great Flood (the great catastrophe or World Destruction) is a status of being ‘chosen’ by God for this New Covenant – as the New Sun replacing the Old Sun and casting Darkness back down into the pit or into the ocean. It is interesting that Ishmael, the primary narrator of Moby-Dick, is the only person to survive this specific Holocaust. As the primary narrator, he is the story-teller; and the story-teller is the writer, the heavenly scribe, who must live so that the story gets told.

We will remember that Ishmael, in our gallery of types, corresponds to the Romantic Artist, the Medieval Autumnal Artist, who turns his back on civilization and returns to nature, returns to the abyss, returns to Death and survives to be re-born again, not as himself, but as the Renaissance Artist, the one who believes in life, light, reason and community.

CHAPTER EIGHT.

TIME CYCLES IN AMERICAN HISTORY

(Making Sense of the Senseless – The Logic of the Irrational Time Cycle)

Readers may wonder why such a long digression into the symbolic intricacies of Moby-Dick (an opaque jeremiad as it is) is necessary to consider America’s current financial disorders. Be reminded that we are looking at the real cause of this world-destruction – and by real I mean the underlying metaphysical causes -- a task which, by definition, excludes surface conditions as being anything more than a chain of effects generated by the Law itself. Moby-Dick is a novel about the Laws of Nature – about both the Laws of Nature’s Body and the Laws of Nature’s Mind. That is why we look at reality through this metaphorical lens.

It is my belief, also, that the American Ship of State, analogically the Pequod, has just been struck by the whale we have been stalking for several decades (or perhaps, on a larger scale, describing Western Civilization, several millennia). The whale has turned on us, has staved in our hull; and our survival as a nation is now being threatened. Learning to speak the symbolic language (in which scriptural texts, and all serious literature, like Moby-Dick, are written) will help us to survive this coming catastrophe.

Ishmael had a natural virtue that protected him. Ishmael had a powerful Guardian Angel protecting him. America must also find her own natural virtue and her own Guardian Angel to protect her from the holocaust we are currently entering.

In our model of history, which has much is common with and owes recognition to the views of Giambattista Vico, the 18^th Century romantic critic of pure reason and re-discoverer of antique wisdom, speaks of the birth of an idea coming in the Winter, in the form of an animating theological idea.

If we look at American history, excluding for the moment the long history of tribal America and its tribal native inhabitants – we will not exclude the Indian history from our picture however, for the tribal history, whether it be the tribal Goths or the tribal Hopi or tribal Shoshoni or tribal Romans lays a bed in which the spiritual seeds reside, germinate, and finally take root when awakened – we see the (transplanted) Puritan Theological State in America taking root from 1492 until the dynamics of the American revolution shook the state loose from its theological root and separated church and state dramatically.

From the Puritan roots evolve the aristocratic Renaissance Men of the Revolution, Jefferson, Franklin, Washington, Hamilton. In a very broad sense we have two pieces of our ‘American microcosm’ puzzle in place. The tyrant part of the puzzle (the Ahab at Noon, the All-Powerful Father Figure) is harder to place, with its non-mystical rational religion and the triumph of business and the material god. The Romantic Autumn is rather clear: there have been several of these. Clearly, the Melville era – the 1830’s -- with romantic writers such as Henri David Thoreau, Nathaniel Hawthorne, Walt Whitman, Ralph Waldo Emerson, Edgar Allen Poe, and Emily Dickinson marks a romantic turning away from Calvinistic materialism which had dominated America for the first half of her existence.

Ann Woodlief writes in American Romanticism:

Politically the time was ripe. The 18th century left a heritage of optimism about man's possibilities and perfectability. The lofty ideals of democracy asserted the value of individuals, regardless of class, and education. Of course, these values primarily applied to white males. In fact, tensions were building which cried out for creative release. Inequality, not equality, was the rule for many, especially women and slaves. The clash of these realities with the idealistic rhetoric led writers to take extremes, championing individualism yet also seeing the darker sides of a fragmenting society.

Economically America had never been wealthier. But the rising materialism and focus on business at the cost of the mind and the spirit was spawning reform movements all over America. Over 150 intentional communities -- from the Shakers to Oneida to Brook Farm -- were formed by people disillusioned by the materialistic values and inequities of American society.

Yet there was enough affluence for people to develop and appreciate writing and reading, and a growing leisure class with cultural pretensions. There was one period of crisis -- the Panic of 1837 -- but that only increased the drive toward material values.

Religion, always a basic concern for Americans, was also ready for romanticism and its kind of pantheistic religion. The stern dogmas of Calvinism had been replaced by rationalistic Unitarianism and Deism. However, they were so rational and so determined to avoid the emotional excesses of the Great Awakening that they seemed dry and cold, unable to satisfy deep spiritual yearnings. People, especially Emerson, were looking for new spiritual roots, personally involving and meaningful, but not traditional.

Connected to this was the rise and professionalization of science, which seemed to many to conflict with religion. Many felt a psychic dislocation, that the bottom had dropped out of their world since traditional values and conventional reality were just not enough for them. They tried to impose meaning individually, for institutions and dogmas seemed to possess little truth. Philosophically, they reacted against the materialistic educational theories of Locke and rationalism. They found Truth more a matter of intuition and imagination than logic and reason. They rejected the mechanistic view of the universe so dear to Franklin and Deists and opted for a more organic view, seeing the world more as dynamic and living.

Aesthetically, the romantics were also in a state of revolt, primarily against the restraints of classicism and formalism. Form, particularly traditional literary forms, mattered much less than inspiration, enthusiasm, and emotion. Good literature should have heart, not rules, although it is never so simple as that.

There were specifically American components to the romanticism of our authors. They were particularly aware of nature, especially its wild aspects, and were beginning to comprehend that it was being lost as fast as they were appreciating it. The physical frontiers were being conquered in this time of "manifest destiny" and there was little wilderness to explore (and exploit). They turned to artistic, metaphysical, and intellectual frontiers to recapture the ecstasy of exploration and discovery.

Reaction was a major, but not the only, mode for these romantics. They confronted the distinctively American pressures for conformity and definitions of success in terms of money. They spoke out, to some degree, against slavery, promoting the ideals of Jacksonian democracy, that "any man can do anything" (if he's white and educated). They sought to creative a distinctive American literary voice; it was time for the cultural revolution to follow the political one. They felt compelled to declare cultural and individual independence from Europe, even though they had little idea of what form that could take.

This could as well be describing the 1960’s in America as the 1830’s. Of course, the 1960’s represented another Autumn in America’s cyclic manifestation. Hippies, with their loud colors and loud music and loud politics, were the colorful leaves falling from America’s Tree of Life. Intentional communities – hippie communes – dotted the American landscape (and spread all over the world, in fact). The Artist, as a type of American Hero, replaced the Businessman/Entrepreneur, who had replaced the Warrior. Inequality was no longer acceptable. The Soul joined the dark races and women in an act of moral solidarity. Communism rose up as a force of order antagonistic to ‘selfish’ capitalism.

Some historians, including Woodlief herself, speak of the terms ‘renaissance’ and ‘romanticism’ interchangeably. From my view, of course, this is not accurate. The ‘renaissance’ moves away from Nature, away from mystical Religion, toward reason and empire and materialism, with its concurrent blessing by a rationalist Religion – embracing the pure, unsullied, perfected forms of classicism. ‘Romanticism’ moves away from Empire, away from materialism, and toward Nature, the wisdom of antiquity, embracing ‘nativism’ (and nativity) and rejecting classicism (universalist idealism) in favor of nationalism, a form of localism.

In modern political terms, the ‘renaissance’ moves toward fascism and the racism of white over black; ‘romanticism’ moves away from fascism, moves toward democracy, communism, and toward the integration (interweaving) of white and black, light and dark. The ‘renaissance’ leads to the separation of men and women in society, white and black in the world; ‘romanticism’ leads, eventually, to the mystic marriage (re-marriage) of light and darkness, man and woman, in the deep part of the Night.

One can speak of ‘romanticism’ as a period of ‘cultural re-birth’, for the artist, as an archetype, is very important in both the manifestation of the Dawn (the renaissance, the creation of the culture as civilization) and the Dusk (romanticism, the creation of counter-culture as anti-civilization). In one sense, the Renaissance Hero seeks to re-create classical, foreign high Apollonian culture, while the Romantic Hero rebels against the classical and seeks to (re-) create a nationalist, nativist, locally-organic Dionysian counter-culture.

Few counter-cultures in recent history have expressed the ‘Dionysian culture’ with such adamantine vigor as the 1960’s counter-culture. We will remember that Dionysus (as Bacchus) was the god of wine, the god of revelry and intoxication (as opposed to the god of sobriety, represented by Apollo), the god of orgies, the god of free love, the god of drugs, the god of romance, the god of rebellion against the established order. Sex, drugs and rock and roll. Anti-war. Anti-material. Anti-urban. Sense over abstract description of the senses. Naturalness; as opposed to the artificial quality of the urban civilization. The hippie counter-culture of the 1960’s was the perfect manifestation of Dionysian spirit.

There was a similar romanticism that occurred in the 1930’s, on the heels of the last major international deflation. Marxism became the official rebellion of the intellectual class during that phase of romanticism. That is, the soul chose to side with the poor, after the body-soul relationship had ended so badly with the international financial collapse in 1929.

During the Renaissance (the Dawn), the Son sides with the Father (and becomes the Father) becoming the Word Made Flesh, expanding Light and Life and Wealth and Masculine Power, describing only the virtues of the world, expressing a Unity with the Father that makes Him/Them (and his society) all-powerful, and irresistible. During the Romantic Fall (the Dusk), the Son turns against the Father, becomes a rebellious angel, condemns the rich, champions the poor, pulls the Sky down (metaphorically), describing only the evils of the world, becomes a revolutionary.

During the Renaissance, the Hero eats from the Tree of Life. Life allows a certain moral paradox, a duality of character. One is both good and evil, because Life demands this.

During the Romantic Autumn, the Anti-Hero eats from the Tree of Knowledge of Good and Evil. He condemns his father, condemns himself, condemns his society, since he now confronts the shadow side of the incarnation, the roots of the Tree of Life he finds beneath the Earth, the roots of the Tree of Life being, themselves, the limbs of the Tree of Knowledge, that have been reflected into the underworld.

1929 Night Cycle Ego-Deflation begins –

1947 Day Cycle Ego-Inflation begins --

1965 Night Cycle Ego-Deflation begins –

1983 Day Cycle Ego-Inflation begins --

2001 Night Cycle Ego-Deflation begins –

2019 Day Cycle Ego-Inflation begins –

So, we have periods of Romantic Ego Deflation (emanations of the anti-hero) in the 1930’s, the 1960’s, and we have intimations of a similar Romantic Ego Deflation occurring with the election of Barak Obama in 2008.

We know that we had a very clear inflation of Ego (manifestation of the Cowboy Masculinity) in 1982, with the election of Ronald Reagan. Did we have a similar manifestation of Cowboy Masculinity in 1947? This is not clear to me. We did have a re-polarization of East and West, Capitalist and Communist after World War II, as the Cold War was kicked into high gear, after a period of East-West alliance during World War II.

In fact, a similar ‘friendliness’ between Western intellectuals (counter-culturists) and the East (communism, first, and Eastern mysticism, next) occurred in both the 1930’s-40’s and in the 1960’s-70’s. My prediction is that we will see a similar re-connection between East and West as we sink more deeply into the current economic catastrophe that too much capitalism has brought on.

The 1920’s and 30’s saw another explosion of artistic production in the world and in America. Some of America’s greatest writers appeared on the scene: Sinclair Lewis, Edith Wharton, F. Scott Fitzgerald, Ezra Pound, T.S. Elliot, Ezra Pound, Eugene O’Neill, Robert Frost, John Dos Passos, Sherwood Anderson, Ernest Hemmingway, Willa Cather, Theodore Dreiser, Gertrude Stein, Hart Crane, Langston Hughes, Edna Ferber, Kathrine Anne Porter, Nelia Larsen, Countee Cullen. The novel reached its apex as an art-form, in the experimental works of genius produced by James Joyce, Thomas Mann, Marcel Proust, William Faulkner, and D. H. Lawrence.

The 1960’s saw a similar regeneration of artistic experimentation and flowering in literature (Joseph Heller, J.D. Salinger, Thomas Pynchon, and many others), the plastic arts, cinema and especially music – rock music, which spawned a revolution in thinking that spread like a wild fire across the globe. Music became a kind of literary act. Music and poetry were married. Rock albums became conceptual novels, with sustained narrative dramatic themes containing messages of morality, political rebellion, spirituality, messages that transcended race and culture.

A similar fertilization of art will also occur over the next generation, if my calculations are correct. Art as a device for entertainment characterizes the Ego-Expansion phase; and especially art as a device for the generation of wealth. Art as a commodity. There is no real meaning to the art during these phases. The art is essentially throw-away art. The art generated in America since the advent of Ronald Reagan in 1982 has been largely throw-away art. Art has become a profession. There is not really much difference between artists and insurance salesmen. Each is ‘in it’ for the profit – and meaning is really an unnecessary (or even a problematic) element in this life procedure. The artist needs money for his family; so does the insurance salesman. That is the Tree of Life, watered by surface needs. The Daylight grows a weaker and weaker shadow; and, hidden in the shadow, is the meaning of the act. There is no polarization between Soul and body during the Daylight. Without polarization, meaning disappears.

During the Daylight, society is one big corporation, all working for the same ends, all parties part of the team. Life is a kind of sport. The strongest body, the strongest will, wins the prize. And the losers should not complain.

But as the shadow grows, animating the Romantic Anti-Hero, art becomes filled with meaning. Polarization between the Corporation (the Body) and the Soul and Spirit sends the society into the Chaos of disunity. Materialism becomes a problem. The life of the Body is no longer trusted. There is some other dimension that is illuminated. Morality appears. The society meets its better angels and the angels are angry about what has been done in their name. This is the Law of Karma.

Since the Sun-Hero (the masculine Cowboy energy of expansion) is killed or wounded by the darkness at the apex of its climb into heaven, we should expect to see some form of symbolic death or wounding occur at or near the beginning of each Ego-Deflation period.

We do see this in 2001, with the Muslim attack on America on September 11, 2001. The destruction of the Twin Towers was clearly a wounding of the masculine spirit in America, the energy of business, expansion, internationalism, construction/erection and the propagation of a single language, and a universal Earth culture. This attack was a knife in the bubble, in fact; air began seeping from the American (and Western) derigible, a loss of momentum that inflated monetary supply did not cure but only made worse.

It is interesting to note that the first Muslim attack on the Twin Towers (1993) – an attack by Earth, by Ground, car bombs set off in the basement parking structure – did not work, because the Day-Cycle was in full force – 1992 being the Dawn of the Day-Cycle – the Night-Cycle forces being too weak to effect a disaster. I will show diagrams illustrating the transition of primary elements from Eartth to Air occurring in 1992 and from Air to Fire in 2001. In 1993 it was not time yet for the force of Night-Cycle destruction to successfully destroy the Twin Towers, the symbol of Global Material Expansion.

Of course, in 2001, Air and Fire met graphically in the Twin Tower destruction. The Night-Cycle was announcing its presence once again.

The tower is a very graphic phallic symbol; and we will remember that castration is an image of the mythological wounding of the masculine Sun-Hero. In Greek myth, Castor and Pollux were the Light and Dark Brothers – the Gemini Twins. Pollux was immortal (the Darkness is not born and does not die); but Castor had to die. Castor shares the root with the word ‘castration’ – the act of ‘castration’ in the context we are using it may be an actual assassination or it may be merely increased regulation of the business class after it engineers its own destruction by (‘bullishly’) running amok in the financial china closet. Regulation is a form of (‘snip-snip’) the female force working to take away some of the wildness and risk and unpredictability of the masculine bull. Taxes are a form of castration. Also, a cut in military is a form of castration.

Was there a Sun-Hero murdered or wounded in America in or around 1965? Yes. Clearly John F. Kennedy was a Sun-Hero, cut down in his prime: the beautiful Sun God, destroyed by his own shadow. Kennedy was very clearly assassinated by the CIA or some shadow form of a domestic intelligence group, perhaps with the assistance of the mafia, both of which wanted Cuba back from the communists for further American business exploitation.

Who was the Sun-Hero murdered or wounded in the world in or around 1929? This is not clear to me. Perhaps Wall Street was the emblem of death in 1929: the collapse of Capitalism (the Tree of Life) under the weight of greed and selfish corporate and personal opportunism.

The Seventh Day of Creation again: when everything stops. When the world ends and sinks out of sight. Something falls, even if we cannot hear it clearly.

I mentioned the Romanticism of Melville, Whitman, Emerson, Thoreau in the 1830’s. To fit our picture, the Romanticism would have to be gauged a little earlier than 1830. However, in the example below, 1803 marks the Midnight Hour, as the New Idea of Manifestation and Will is born in the soil of the Mother Principle, at the darkest hour, with Physical Light and hope almost nonexistent (which corresponds, of course, to the period of rule of Jimmy Carter, 1977 – 1981 – in our most recent Midnight Experience. Jimmy Carter represents the saintly side of the American soul. He is not worldly – he is moral, inwardly directed, educated, noble, gentle, concerned with the saving of the American soul, a friend to women, blacks, the poor, the underprivileged.)

The Sun defeats the Darkness in 1811. The Sun peaks and begins its decline in 1821 – but the Sun is not truly overthrown until 1830. In 1830, the Romantic Angel wins and essentially rules until 1848. The Angel of Light then rules, first as the Son, from 1857, and then as the Father who falls, from 1866.

1803 Day Cycle Ego-Inflation begins --

1821 Night Cycle Ego-Deflation begins –

1839 Day Cycle Ego-Inflation begins –

A way of looking at this same information in a slightly different way, would be:

Midnight 1803

Dawn 1812

Noon 1821

Dusk 1830

Midnight 1839

Dawn 1848

Noon 1857

Dusk 1866

Midnight 1875

As a reminder, we would expect to see a significant increase in manifest masculine power (business strength, reproduction strength – more births per capita – and foreign military intrigue) from, in the above example, 1803 through 1821. Of course, we see exactly that in the Monroe Doctrine (1823, a bit later than we would have expected vis-à-vis our time cycle schedule) which essentially threatened war with an European or foreign nation attempting to colonize or threaten any state or area of continental America. The Monroe Doctrine was a secondary declaration of independence, and a precursor of the doctrine of Manifest Destiny that surfaced in the early 1840s.

We would expect to see an economic downturn beginning around 1821, with more civil and social unrest, a growth in feminist and underclass consciousness – perhaps in this case exemplified by more sympathy with the plight of the American Indian – and a higher death rate – from 1821 through 1839.

The storms come (the wind begins to blow, bringing storms and combat between the Light and the Dark) at Dawn and at Dusk. So we should expect wars and/or civil wars at 1812, 1830, 1848, 1866.

We should expect arrogance and economic depression at 1821 and 1857.

We should expect introspection, an otherworldly sense of detachment at 1803, 1839 and 1875.

Does the year 1803 really represent the Midnight of this cycle of American history? Thomas Jefferson is elected president in 1800. Jefferson is an educated southern aristocrat, a farmer, a gentleman, a friend of the poor, a man with a rich interior life, uninterested in worldly political entanglements. A democratic Republican (the Democrats of this era) who virulently opposed the Federalists (the Republicans of this era) and their schemes for a National Bank, for government of, by and for the Business Class, by bankers, and by a European-looking East Coats (urban) monied aristocracy. Jefferson is a prototype for Jimmy Carter, a man who described himself as a ‘Washington outsider’, a man suspicious of the power establishment and the centralized power of the imperial presidency in Washington. Carter later described Jefferson in his memoirs as ‘a great humanitarian who love the common people’. The same could be said of Carter. It could not be said of Ronald Reagan or George Bush Senior however.

Did ‘Ego-Expansion’ begin in 1803? Yes, in a manner of speaking. In May of 1803, Jefferson purchased the Louisiana Territory from the French (we will remember that Jefferson trusted the French more than he trusted the British; the Federalists trusted the British, some even wanting a king in American, and did not trust the French, the breeding ground of mob democracy and revolution) for ‘inward’ expansion. One need not look back too many years to see a similar virulent alliance/oppositon between Republicans-England against Democrats-French. During the Iraq War, a vengeful anti-French atmosphere rose in American, nourished by the Bush Administration – nourished also by French arrogance and self-satisfied hyper-nationalism. We will see quite clearly that the British represent the Male Principle (reason, will, strength, fire) in the International order; the French represent the Female Principle (emotion, love, softness, water, fickleness). The Dawn is the force of resurrection (a rose erection – that is, a hard, disciplined, fertilizing penis); the Dusk force has less interest in raping the world, and has more interest in finding completion through a resolved emotional wholeness, to overcome a recent fragmented condition – the woman represents home and hope to him at this stage, rather than a something above which he must stand.

The Dawn and Dusk, as I have written, usually represent conflict, the Dawn a triumph of the manifest destiny of business expansion and the Dusk, quite often, social and civil strife, with emphasis on fairness, equality, and help for poor citizens. The Dawn loves power and wealth; all citizens, given the rife optimism, begin to imagine themselves either directly or indirectly potential royalty, potential millionaires and aristocrats. The Dusk hates the rich, hates the aristocracy, hates privilege, hates injustice, hates realization of their own failure, fears for its own survival (Death is heavy in the air), and seeks a social system which offers aid to those who have fallen.

1812 should be a time of a revolution against an outside power, similar to 1776, the revolution for independence against British Imperialism in America. And it was. America declared war on England in 1812, after Great Britain impressed American seamen and blockaded American ports. Interestingly, the New England and Mid-Atlantic states did not support the resolution of war in the Congress, since their cultural and trade ties were more clearly tied with England than were those of the other regions of America. British troops invaded many American cities, including Washington D.C., where they set the Congress and the White House on fire. This war lasted two years, before the British signed the Treaty of Ghent, ending the second war between these two nations in less than fifty years.

Do we find an expansion of the American Empire, business wealth and science, technology and political will between 1803 and 1821? And do we find a economic depression around 1821?

1817 is dubbed the ‘Era of Good Feeling’. This is comparable to the ‘Roaring Twenties’ and ‘Happy Decade’ of the 1990’s in America, before the economy imploded and left millions out of work and with little hope.

The Panic of 1819 was, according to historian David Reynolds, ‘the first great American depression’. Reynolds writes in Waking Giant: American in the Age of Jackson:

All the way back during the Presidency of James Monroe, American workers got a harsh lesson in the vicissitudes of capitalism when the economy crashed. The Panic of 1819 initiated the nation’s first major depression.

As in the case today, that crash, too, resulted from a confluence of national and international events. In the heady atmosphere after the War of 1812, both U.S. imports and exports surged.

This was the first of several severe downturns that would tarnish America’s otherwise vigorous economy throughout the 19th century.

European demand for American goods, especially agricultural staples like cotton, tobacco, and flour, increased. To feed the overheated economy, state banks proliferated, and credit was easy.

The federal government offered for sale vast tracts of western lands, fueling real estate speculation funded by bank notes. Reserves of specie, or hard money, plummeted, especially in the West and the South.

As early as 1814, Thomas Jefferson warned, “We are to be ruined by paper, as we were formerly by the old Continental paper.” Two years later, he asserted that “we are under a bank bubble” that would soon burst.

The Second Bank of the United States was supposed to steady the economy, but gross mismanagement in its early phase sapped its effectiveness.

The bank’s first president, William Jones, instead of taking steps to regulate the nation’s currency, doled out huge loans that fed speculation and inflation. He also kept lax watch over state banks, where fraud and embezzlement created chaos.

A congressional committee’s proposal to terminate the nearly insolvent Bank of the United States had little backing — because 40 members of Congress held stock in the bank.

The bank’s problems arose at precisely the wrong moment, when the economy needed a firm rudder during its postwar expansion. Jones resigned and was replaced by the South Carolina congressman Langdon Chews — and later by the Philadelphia lawyer Nicholas Biddle.

Although the bank sharply contracted loans in 1818, the damage had been done. The Bank of the United States, far from helping the economy, was among the destabilizing forces that led to the depression of 1819.

At the same time, swelling crop yields in Europe reduced the demand for American farm products, whose prices plunged. An economic contraction in Europe led banks there to reduce credit. The crisis abroad, coupled with the contraction at home, forced American banks to call in their loans as well.

By early 1819, credit, once so easy, was unavailable to many Americans. With specie reserves depleted many American banks failed, and other businesses followed. Sales of public lands plummeted. Unemployment soared, and in some regions food and other basic necessities were difficult to come by.

Especially hard hit were cities outside of New England like Philadelphia, Pittsburgh, and Cincinnati. Farmers suffered too, though many survived by resuming a subsistence lifestyle.

With insolvency rife, prisons were overcrowded with debtors. The depression lingered for two years. It was the first of several severe downturns that would tarnish America’s otherwise vigorous economy throughout the 19th century.

The Panic of 1819 fostered mistrust of banks, bankers and paper money. The volatile Tennessee politician Davy Crockett spoke for many when he dismissed “the whole banking system” as nothing more than “a species of swindling on a large scale.”

The aging Thomas Jefferson complained that the new generation, “having nothing in them of the feelings or principles of 1776, now look to a single and splendid government of an aristocracy, founded on banking institutions, and money incorporations... riding and ruling over the plundered ploughman and beggared yeomanry.”

The Second Bank of the United States was supposed to steady the economy, but gross mismanagement in its early phase sapped its effectiveness. This mistrust of corporations was aggravated by landmark decisions handed down in 1819 by the Supreme Court under Chief Justice John Marshall. In Dartmouth College v. Woodward, the Supreme Court protected private corporations against interference by the state governments that had created them. In McCullough v. Maryland, it ruled that the Bank of the United States, though privately run, was a creation of the federal government that could not be touched by the states. These pro-capitalist court rulings aggravated class divisions, which escalated over the next decade. The 1820s saw the meteoric rise of Andrew Jackson, who defended working-class Americans against what he characterized as the oppression of a wealthy elite epitomized by the central bank.

The recession of 1819-1822, which was blamed largely on bankers, was one of the economic forces that made many Americans look to Jackson as the savior of the working class.

Reynolds speaks of the 1819 Panic creating a recession that lasted through 1822. But this does not fit our picture of an 18-year Night Cycle experience.

Noon 1821

Dusk 1830

Midnight 1839

Using our logic, the ‘depression’ should have lasted from about 1821 to about 1839. In fact, this is what we do see.

Panic and Depression, 1832. In 1832, President Andrew Jackson refused to renew the charter of the Second Bank of the United States; and Jackson transferred government monies to state banks. Nicholas Biddle, head of the National Bank, called in all outstanding commercial loans. A panic followed; and then a recession. Eight hundred banks closed; and the national banking system collapsed. One third of manual laborers were out of work in New York City alone. And the national unemployment rate was over 10%.

Panic and Depression, 1836. President Andrew Jackson comes to recognize that his defeat of the National Bank in 1832 might present long-range problems for the country. In an effort to short-circuit the inflationary consequences of unlimited printing of money by unregulated state banks, Jackson issued the Specie Circular, which law required all public lands be paid for in gold or silver, hard currency. Land sales and prices collapse. The hoarding of precious metals. Land and metals speculation explodes.

Panic and Depression, 1837-1843. Historian Reynolds writes that five weeks after Martin Van Buren’s election, national pessimism and erratic bank policies sank the economy and triggered ‘the worst depression that the United States had known’. Reynolds writes that this fourth panic since 1819 lasted from 1837 through 1843:

The [1837] downturn resulted from various international and native economic developments.

In 1836, the Bank of England, fearing a run on its deposits of specie (silver and gold), sharply contracted credit. British companies curtailed their business with the United States. Foreign demand for U.S. cotton plummeted, cutting cotton prices nearly in half.

Southern planters suffered and many northern companies associated with the cotton trade failed. The Specie Circular, which mandated that speculators could purchase public land only with hard money, caused a drain of specie from eastern to western banks.

In April 1837, world prices suddenly collapsed, creating a run on banks. On May 10, 1837, all banks in New York suspended specie payments — that is, they refused to redeem paper currency in silver or gold. Banks in New Orleans and other cities soon did the same.

The specie suspensions caused panic, which in turn led to widespread bank failures. The New York diarist George Templeton Strong said, of the banks, “So they go — smash, crash. Where in the name of wonder is to be the end of it?”

All told, around 40% of America’s 850 banks soon were out of business. Most sectors of the economy slumped. Business failure brought unemployment. By January 1838, half a million Americans were jobless.

The economy then briefly rebounded, but another contraction abroad brought on a second panic in October 1839, leading to four more years of depression. Wholesale prices tumbled, and the nation’s money supply shrank. Imports plummeted, as did property values. America would not again see such deep, prolonged economic malaise until the Great Depression of the 1930s.

Predictably, President Van Buren was blamed for the downturn. Whigs insisted that Jackson’s reckless policies, carried forward by Van Buren, had wreaked havoc on the economy.

What was needed, they argued, was government-sponsored stabilization of the economy through a new national bank. As the “out” party, the Whigs profited politically from the depression, gaining in state elections at moments when it was especially bad. Still, as the 1840 election approached, Van Buren had reason to be confident of re-election.

He had consolidated the Democratic Party. He had averted war and subdued sectional tensions. He had run a tight financial ship with the assistance of generally skilled administrators. In his view, he had put the nation on a course toward economic recovery by divorcing the government from banking. He did not seem to recognize the depth of the nation’s crisis. A much later Democratic presidential candidate would heed advice that should have been shouted in Van Buren’s ear: “It’s the economy, stupid!”

Despite the small upturn of the economy in the middle of Van Buren’s term, the nation had never seen such hard times as it did under him.

It was difficult for many Americans to fathom the withdrawal of the government’s money from many banks at a time when money was in such short supply. The Whig arguments for an expanded currency, relaxed credit and governmental participation in everyday finance made sense at a time when scarcity reigned.

The Democrats’ largest base was among rural and urban workers. The Whigs appealed mainly to business interests in the North and plantation owners in the South, but also to some sectors of the working class. Neither party was wholly “the people’s party,” though the Democrats had seized this image.

The Whigs believed in government control of the economy through some version of the American system. They tended to be affiliated with movements like temperance, prison reform, nativism and anti-prostitution.

The turnout on election day was exceptionally strong. Voter participation, which had stood at 58% of eligible voters in 1836, reached an astonishing 80% in 1840, setting a pattern for high turnouts that continued through the 19th century. Although the Log Cabin hoopla contributed to the excitement, recent historians have shown that it was the mass hunger for economic reform that brought out voters in unprecedented numbers. The Whigs surged to victory.

Reynolds’ description of the differences between the Democratic and Whig party principles shows the difficulty in assigning fixed labels to political parties, since these two parties tend to adjust to one another over time. The Whigs ‘appealed mainly to business interests in the North and plantation owners in the south’. The Democrats largest base ‘was among rural and urban workers’. This seems pretty clear. The Democrats were on the side of the poor; the Whigs (Republicans) were on the side of the rich. The Whigs ‘believed in government control of the economy through some version of the American system’ – this really means, I think, the Whigs wanted a National Bank; and they wanted the banks in control of the economy. This does not really sound like Republicans of today, who want private banks to run the world; and want government ‘interference’ reduced.

Whig excitement over ‘moral’ (almost biblical) issues like temperance, anti-prostitution, prison reform sounds largely like today, where Republican outrage over gun control, abortion rights, prayer in school, stem-cell research rings somewhat hollow when compared to the overwhelming silence connected to outright business theft of private and taxpayer funds. The Republican outrage seems more directed at the government giving failing businesses bail-out money rather than at corrupt and criminal businesses for engineering their own demise. Remember, the businessman is the hero of the Republicans – they cannot very well crucify their own hero, so they have turned their anger, instead, on the messenger.

We will remember that a basic tenet of early Republicanism (Federalism, Whigism) that a strong federal government was needed to protect the monied interests in America from the tendencies of state governments to be too populist or too democratic. Early Democrats (democratic Republicans) argued for states’ rights, for local autonomy, for a weak central government, and for a non-imperialistic federal government and foreign policy. These principles have flipped several times in history, most notably in the 1950’s, when democrats began arguing for a strong federal government to enforce federal civil rights laws, protecting the Underclass (nonwhite) from domination by the Overclass (white). A split in the democratic party then occurred, with southern democrats aligning more with northern and western Republicans in arguing for states rights, against federal mandates. The new alliance of Republican and southern white Democrat carried Nixon to victory in 1968 – and became the New Republican Party of the late twentieth century.

State’s rights meant one thing to Democrats in the 1800’s, protection from the Big Business and Banking Class of northeast America and their drive for an America that was urban, industrialized and imperialistic (world trade is imperialistic by nature); whereas, state’s rights for the New Republican Party of the twentieth century was founded in racism (opposition to federal civil rights laws) and old-time Bible-thumping anti-humanism (abortion, school-prayer, gun-control, stem-cell research issues).

If Dusk is 1830 in our picture of cyclical American history, we should expect a Romantic, anti-hero to appear on the scene at approximately this time, a fighter for the poor, the working classes, armed against the rich aristocrats.

In 1828, Andrew Jackson is elected President of the United States. Jackson is a southern populist, friend of the working class, enemy of big business and banking, and decidedly not an aristocrat.

It is interesting that Jackson was nearly elected in 1824, but southern aristocrat Henry Clay threw his support away from Jackson, to East Coast aristocrat John Quincy Adams, for which support Clay was appointed as Secretary of State in Adams’ administration. Regional alliances meant less than class alliances and personal fortunes apparently. The southern aristocrats viewed Jackson suspiciously as his supporters among the working poor in the north and south smacked too much of ‘mob-democracy’, feared equally by southern plantation-owners (and slave owners) and northern (or more accurately north-eastern) businessmen. Andrew Jackson opposed the National Bank, as had Thomas Jefferson – and Jackson abolished it when president. Andrew Jackson writes:

It is to be regretted that the rich and powerful too often bend the acts of government to their own selfish purposes. Mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges... which are employed altogether for their [mutual] benefit…. No American should have to live under the oppression of a sprawling oversized central government; or suffer the loss of personal autonomy and liberties to perfunctory bureaucrats; or endure the invasion of privacy by officious functionaries; or struggle through a life trying to stay ahead of inflation; or endure the nightmare of over regulation and criminalization; or tolerate mass corruption and fraud by self serving elected officials; or to grind out a living only to be ravaged by labor-wage taxes while Federal Reserve Bankers get rich off baseless currency; or die fighting in some needless war.

We recall, of course, that American wars, especially today, but earlier as well, were almost always fought by the working poor Americans for the sake of American business interests. That is, the poor fought and died and were maimed and crippled while the rich sat home and cheered from the shore, living in safety and comfort, largely in disdain of the American working poor. Many of the poor, working class soldiers returning from war did not have jobs waiting for them when the returned.

Andrew Jackson was a friend of the white working poor in America. He was not a friend to the slave or the Native American however. He openly ignored federal policy and contracts signed with the Cherokee Nation and forcibly evicted them from ancestral homelands in Oklahoma, freeing up more land for white ownership and westward expansion of southern plantations. Jackson seemed to share Jefferson’s vision for America, of a peaceful Greek-like agrarian republic stretching westward over the North American continent: an ‘extensive Republic, studded with cities, towns, and prosperous farms, occupied by more than 12 million happy people, and filled with the blessing of liberty, civilization and religion.’

In the romantic literature of this time, we do see, however, in the writing of Melville and James Fennimore Cooper, Mark Twain, and in the newspapers of William Lloyd Garrison, a growing intellectual opposition to the institution of slavery, and a more positive portrayal of ‘savage cultures’ (the Ego’s shadow) in popular culture.

In 1831, with darkness settling in, Nat Turner, an educated slave in Virginia, led an insurrection of slaves on a killing spree of white residents near Southampton. In all, 70 whites were killed. Over 100 slaves were killed in retaliation.

We should note that at Dawn in our time-cycle of historical developments, white domination of black (and hatred of the shadow) wins out and carries through until Noon, when the shadow is thoroughly defeated. By the same token, Dusk is a time when black defeats white, and dominates white through Midnight when black hatred of white also finds its peak. Dusk should be a time when black violence against whites escalates, when Black Panthers, Black Muslims, ‘Black Pride’ movements manifest and become strong forces of anti-law, seeking anti-hero justice for past injustice. Black power generally should be growing from the killing of the White Father Figure, Light, at or shortly after Noon, through the re-birth of Light, at Midnight.

The 1831 killing of whites in the Nat Turner insurrection fits in to this time frame.

Noon 1821

Dusk 1830

Midnight 1839

The Black Panther Party was founded in Oakland in 1966.

Dawn 1956

Noon 1965

Dusk 1974

The Nation of Islam (Black Muslims) was founded in Detroit in 1930.

Dawn 1920

Noon 1929

Dusk 1938

Noon is where Adolph Hitler triumphs, with his shadow and adversary, the Jew, nearly eradicated. Likewise, Midnight is the point in our time-cycle of historical development when black hatred of whites should also find its peak. Whites (light) have almost no power at Midnight.

The Soul is on the side of the Blacks at Night; and on the side of Whites during the Day. This is a balancing mechanism. Jehovah gives and Jehovah takes away. The Soul is the female (Water) element. The Soul attaches herself to the Body and to the Mind sequentially.

Let’s remember also that when we speak of White and Black we are not only speaking about racial types and skin colors. White is Daylight and is the Sun and is Positive Electrical Energy (generative). Black is Nightlight and is the Moon and is Negative Electrical Energy (receptive). In any given relationship, the black man could be the white force (more positive) and the white man could be the black force (more negative). The black man could be white and the black woman could be black. The white woman could be white and the black man black. The black woman could be white and the white man black. All racial types fit this descriptions: the Asian man can be the yang force and the white man the yin force. The Asian woman can be the yang force (although most Asian men will probably debate this) and the Asian man the yin force. The same is true for Hispanic, American Indian….all racial or ethnic types.

Each individual is made up of all four types of force we describe in our historical cycle blueprint. I am Michael the Archangel at Dawn, driving Satan (my own darkness, pessimism, longing for death and destruction) down as I utilize positive energy to regain my sense of hope and the strength of willful activity. I am also Julius Caesar at Noon, seeking to enslave the world to my own sense of what is right and needs to be done. I am Melville and James Joyce and Marcel Proust and W.B. Yeats at Dusk, when I turn my back on my own creation and abstract my will from the material world and pray for its demise. I am also the darkened face of the Dark Monster Siva who lives down at the bottom of the well, seeking to kill myself and the entire world with me, seeing only the negative values of the world, seeing only darkness. I am also Jesus Christ, Horus, Apollo, and every other Sun-Hero born of the virgin Moon who re-discovers value in life and rises up out of the darkness to ascend the Magic Mountain (Aetna, Olympus, Sinai, Ararat) to find the Father again in his Heaven.

It is a complex task to simplify all the complex compositions of dark and light into elemental symbols that define a stage in the cycles of history.

When I speak of the Black Strength Movements (Night Cycles) I must also pay close attention to the rise and fall of feminist movements. The most recent feminist movement will be born at Noon (1965), will achieve a kind of battlfield victory at Dusk (1974), will be at their greatest extent of power at Midnight (1983), and will be cast down and defeated at Dawn (1992).

Noon 1965

Dusk 1974

Midnight 1983

Dawn 1992

In some ways, symbolically-speaking, we can see the Black Movement of the 1960-70 era defeated at Dawn in 1992 in the guise of an incident somewhat similar to the insurrection of Nat Turner in 1831. In 1993, an unemployed Jamaican black man named Colin Ferguson, living in New York, boarded a Long Island Railroad Line car in Garden City, New York and pulled an automatic pistol and began shooting as many white people as he could. He killed six and wounded 19. He said something about wanting to kill as many white people as he could. His original trial lawyers proposed a very innovative argument: that Ferguson suffered from a psychotic condition of black rage when he committed the crime. Ferguson fired his lawyers in order to represent himself. His argument was that he had not done the shooting, that he was being framed by white people for the crime. Notorious liberal attorney William Kuntsler tried to defend Ferguson before the trial began, attempting to argue that Ferguson had been driven to mental illness through years of living in an oppressive, racist society.

Of course, this argument, if believed, would logically have done away with all human laws. This argument would provide legal justification for any black person, any minority, any oppressed person (from any race), anyone feeling he or she was oppressed (from any race or ethnic group), any human being in other words, to kill any person or persons that the aggrieved party (the accused) thought might represent the oppressors, through actual personal oppression, or by way of ancestral complicity. That argument, if accepted, would have essentially reduced humanity once again to the jungle, with a law of only kill or be killed, oppress or be oppressed.

Kunstler argued that Ferguson’s refusal to follow Kunstler’s advice (to plead insanity on the basis of sustained racism) proved Ferguson’s insanity and proved Ferguson’s psychological incompetence. (Only a lawyer would be able to phrase an argument proving sanity was linked to the gospel being sold by that lawyer himself.)

Clearly Ferguson was a murdering racist. He was a black racist, who killed people because they were white. He killed six and wounded almost 20 others and he would have killed many more if he had not been wrestled to the ground by his intended victims. Now if a white man had done the same to a group of blacks in a Selma Church for instance (which a white man or men had done, in fact), a great chorus of distress would have been raised by both black and white people. But when Colin Ferguson killed and wounded white people riding home on a train, very few voices of outrage were heard, and almost no black voices. Black racism was apparently acceptable, understandable, justifiable as retaliation for past sins by the white race. The fact that Kunstler and other white liberals, and blacks, might argue that such generic racial profiling by a black man with a gun in his pocket should be allowed under the law, based on past slights or sins or oppressions, essentially opened the door to all crimes potentially based on the rationale of righteous indignation or vengeance.

There are White racists at Noon and there are Black racists at Midnight and both are unbalanced and dangerous. Murder of innocents by White racists or murder of innocents by Black racists is both unacceptable and must be resisted. The illusion is that one side is right and good; and the other side is wrong and evil. When a being is polarized, they believe this illusion; and they are willing to kill and be killed for this truth.

The Dawn Force, becoming Whole again, understands that all things are a composite of dark and light, of good and bad, of heaven and earth. The Dawn Force is neither White nor Black, but both White and Black, both Day and Night, both Man and Woman. In Jewish Kabbalistic writing, the first man is Adam Kadmon, Day and Night, Man and Woman, High and Low, Angel and Devil, all things compressed into one complex being.

White guilt had ebbed; and was now flowing. The rationale of Night that all blacks were good because they were victims of the whites; and that all whites were bad because they victimized blacks was vanishing as all half-truths eventually vanish. Life is complex. Life almost never conforms to easy, simplex ideals based on either stereotypes or anti-stereotypes.

In the 1990’s I wrote a collection of short-stories entitled The Death of a Liberal. This series of stories examine, as I describe it, ‘the legacy of the liberalism of the 1960’s from the perspective of the 1990’s – a middle-aged eye being cast back on the shadows of the idealisms of youth. One story -- ‘The Professional’ -- a about a friend of mine, Jeff Smith, who moved to Seattle after finishing architecture school. Jeff was a very talented student, a gifted designer. One early morning, walking to work, Jeff was attacked by a black man who hit him over the head with a baseball bat and stole his wallet. This was essentially the end of Jeff’s life. He could not recover from the attack. He lost his passion for architecture. He lived in fear. He finally bought a gun and began looking for his attacker. Jeff learns the attacker goes by the street name ‘Batman’. Here is an excerpt from the story:

Jeff didn’t give up. He performed his new ritual aggressively, becoming, in his own mind, a citizen policeman. People in the ghetto didn’t bother him. They probably sensed that he was armed, perhaps with a weapon and more obviously with rage, and so they kept their distance.

Jeff went into Jake’s store each morning, when he had finished his patrol. He tried to get the old man to talk with him. The old man took his money, said nothing. Jeff usually left with donuts and coffee.

One day Jeff showed up in the middle of the afternoon. It was almost Thanksgiving. Three old men, including Jake, were sitting together near the back of a store, near a wood-stove. They were talking and laughing. Jake was surprised to see Jeff so late in the day. He didn’t like seeing the white man come into his store.

Jeff bought a coke. Then he followed Jake back to the wood-stove and pulled up a folding chair to sit with the men.

Jake said: “I didn’t hear anyone invite you to this party, mister.”

Jeff said nothing. He sat down with the old men. He warmed his hands at the stove. Smiled. And said: “Any of you men know a young black man named Batman?”

The three old men became silent.

“Batman hit me in the head with a baseball bat a few months ago,” Jeff said. “I was walking down the street on my way to work. He smashed me in the head, so he could take my wallet. I don’t have my job anymore. I had to give it up. I have pain all the time in my head now. I want to find the man who did this to me. Do you people condone what this man does? Is it alright with you if he hits people in the face with a baseball bat? Are you so filled with hatred that you tolerate such behavior...?”

“Wait a minute,” replied Jake. “What do you think? You think we support such behavior...?”

“As long as it’s a white man he’s hitting, I suppose you do,” Jeff said.

“Maybe that’s just the payback you get, after so many years of brutalizing the black man....” another man said – his name was Gerald. He wore blue coveralls, and wore a Los Angeles Dodger baseball cap.

“I didn’t brualize any black man,” Jeff replied.

“Yeah, but your ancestors probably did,” Gerald said.

“I don’t know about that,” Jeff said. “I know that I had ancestors who died in the Civil War fighting against slavery. Whites didn’t create black slavery, you know. Black Africans enslaved other black Africans and sold them throughout north Africa long before the whites ever came along. There’s always someone to blame for your problems. That’s an easy way out. Just blame the whites and accept your role as a victim in this world. In fact, black people have been victimized by other black people for centuries. Do you think Batman harms only white people? If he harms white people, then he probably harms black people too. In fact, the last person he attacked was a black man, not a white man. He’s a gang member. Gang members prey on their own race. Why do you feel that you have to protect a murderer? If a white man is a murderer, I don’t have any allegiance to him because he’s white. If a white man is a murderer, then let’s put him to death, and get rid of him, so the rest of us won’t have to live with the pollution of his presence. If a white man had hit me in the face with a baseball bat, then I’d be hunting him down too. We have to get rid of the criminals, so that the rest of us can live decent lives...!”

“Those are just words,” Jake replied. “You want to do away with black criminals. Why are black people criminals? Because they’re poor...!”

“Not everyone who is poor is a criminal,” Jeff replied. “There are a lot of poor black people in Seattle who aren’t criminals. During the Great Depression, crime went down. Criminals make life in your neighborhood even worse than it is in my neighborhood. You protect thugs and killers because they have black skin. To hell with them. If they are criminals, then they pay for their crimes, no matter what color they are!”

“You think there’s no such thing as persecution of the black man...!” Otis said, the third man. He looked as if he had been an athlete, still trim, wearing a Seattle Seahawk jersey.

“Racism comes from thinking of a man as being part of a race instead of as an individual,” Jeff replied. “The black race will never be raised as a race out of poverty. Individual black people will have to raise themselves up, through education, against bigotry. The blacks seem to believe that the government will use a magic wand and create equality through some special law. But equality is something that is achieved through the efforts of individuals. No race is raised magically into the heavens. There are poor whites and ill-educated whites and criminal whites too. Each race has good and bad. So, when we understand that, then we move to the point where the individual is what matters. We judge a tree by its fruit, not by its bark. If an evil black man is punished, that is not to say that all black people are punished. Individuals commit crimes; and individuals must be punished for their crimes. You should be less concerned with the color of a man’s external skin than with the color of his internal skin. The quality of his soul. “

“I’m asking you to leave my store,” Jake replied. “We did not ask you to come here. We really don’t want you being here with us...”

Jeff had nothing more to say. But he wrote out his phone number and left it with Jake. “If you want to tell me anything about this Batman, just call me and leave a message.”

Then Jeff left the store and stepped back into the cold wind, moving toward home.

Jeff continued to perform his patrol twice daily. One Tuesday in December, having returned home after a day out, Jeff turned on the television to see a special news report: a disgruntled black man, Colin Ferguson, had turned a handgun on a group of commuters in a train outside of New York City. The man calmly shot 23 people before being overpowered by three men on the train. He carried over 100 rounds of ammunition and bits of a journal in his pocket in which he described his hatred for whites, Asians, and conservative blacks. The report showed a young woman being carried on a stretcher from the train. She was beautiful, in her mid-twenties. She had worked as an interior designer in New York. Colin Ferguson had shot her through the neck, muttering “You’re all going to die! You’re all going to die!” Only whites and Asians had been shot.

Jeff was furious. It seemed to him that acts of brutality were occurring daily. Racially motivated brutality. It was the end of the world. The criminal race had rose up from the dead and had found no resistance. The courts had failed. Justice for crime must be quick and exacting. Murder could not be tolerated, or civilization would die. Each citizen should be carrying a gun, Jeff decided. He considered buying a six-gun and holster, similar to the old west, as a visible sign that he had armed himself and would not be taken without a fight. His head began to throb. He had headaches almost every day, whenever he became agitated. He looked at himself in the mirror. His jaw was now permanently twisted to the right of center. His hair seemed frail and frightened into old age. The structure above his left eye was dented visibly in toward his brain. He had become ugly. Yes, he was ugly. He rarely thought about his appearance. But his beauty had been stolen from him, his charm, his glow. He had a dark soul now. The night had descended upon him. Nothing was illuminated. Nothing was alive, except his anger, and his desire to be liberated through retribution.

The phone rang.

“Jeff Simms?” the voice asked. The voice was deep and old and sounded like a black man’s voice.

“Yes,” Jeff replied.

“1307 Jefferson Street, in the back. That’s where Batman lives.”

The phone went dead.

I include this excerpt to demonstrate the kind of rationality and individuality (the opposite of the group awareness of the Night Cycle tribalism) that typifies the appearance of the Dawn and regeneration of the world of form at a time of cultural renaissance, when Law, Reason, Civilization are again valued – and when Lawlessness, Chaos, Tribal Logic, and Emotional Righteousness are less valued, in fact, get cast out.

I was a bona-fide liberal throughout my college years (1970-74) and throughout the Carter presidency. That is, I was a white man on the side of the Shadow. In my mind, while in college, the dark races were the victims of the white races. My father’s world was absolutely evil and corrupt. I supported the civil rights movement; I marched against the war in Vietnam; I supported the Dark, Female, pacifist force against the capitalistic, militaristic Father. I was even a communist for a few years during the 1970’s. But this all began to change slowly.

I remember sitting on a hill in Oregon some time during the early 1980’s, with my brother and some friends from college. We all shared a similar world-view. Above, a jet plane passed, leaving a vapor trail in the sky. I said: ‘Isn’t it amazing, there is a highway in the air just like there is a highway on the earth.’ This comment was met with a stunned silence. Then I said: ‘It’s pretty amazing what humans have been able to do. Look at this plane. It weighs tons – and it’s able to fly people all over the earth.’

My friends were anti-man, anti-machine, anti-technology, anti-human growth. And I had been too. But the earth turns; and we turn with it.

I had been on the side of the black race in America for several decades. All blacks were good; all whites were bad. Blacks had the right to kill whites, since their violence against whites was a form of political retribution for past injustices.

But my perspective was changing. The middle principle was changing sides, moving toward the light, away from the dark. The illusion is that one side (either side) is right, and the other wrong. The ideal, moral perspective gets lost. The paradox replaces it. There are good blacks and bad blacks; there are good whites and bad whites; there are good and bad poor people, and good and bad rich people. Life is more complex than black and white. Colors began to be born (Spring and Autumn, Dawn and Dusk, are times for colors to appear in nature, afterall). Individual judgment began to replace political/religious/scientific dogmatism.

I began to forgive my father for not having been perfect. And I began to forgive myself. I did not have to be martyred by the dark race for past sins committed by assumed ancestors. I was responsible for myself. I was responsible for my own crimes, not my race’s crimes. I was not willing to allow Nat Turner to come in to my house and murder my family because Nat Turner had been abused by white landowners in Virginia more than 100 years earlier.

I was white. If there were to be a racial apocalypse in America, and races were to kill races, blacks would kill me. I was white. In choosing death (and tragedy), I would align myself with the poor dark races and see my own death as martyrdom for past sins. In choosing life (and comedy, levity), I would align myself with the rich white races, and see my own life as an expression of Jehovah’s will that I live.

The Dark Clouds, the Storm Gods, the Negative Floodwaters, are driven away at Dawn by the Wind and the Will and by the heat of the Sun.

CHAPTER NINE.

TIME CYCLES IN AMERICAN HISTORY, CONTINUED: THE MASCULINE IDEA OF MANIFEST DESTINY

(Looking at the Magic Lantern as a kind of Magical Quadrant)

We were working our way through the Nineteenth Century, with at least some limited success, until my digressions led us slightly adrift.

This type of typological historical analysis in which we are engaged is a bit like trying to describe the images reflected on a wall by light being cast through a magic lantern. Shapes are sometimes grasped, glimpsed, then lost, as the turning lantern suggests allusive connections, new interpretations. My intent is to avoid describing these images as rorschach designs only, as simple shapes cast up out of my own mind, without relevance to the phenomena they are fashioned by.

The main premise of this book is that we have recently entered an 18-year economic downturn – and that the economic recovery will not occur until about 2019. So my main focus, again, is on the Noon-Midnight experience of Dionysus, the peaking of the expansion, and the succeeding descent into negative, discordant matter, as a way of trying to imply what lies ahead for America as a nation and as part of a larger world community.

I apologize that my style of investigation is not as linear as some readers might like. There is really very little that is truly linear in my subject matter; and I am reading this landscape (and recording it) more like I might build a sketch or a painting, than as if I were recording a mathematical proof.

We would expect a seed idea of re-born masculinity to appear around the Midnight hour, at about 1839. This masculine re-birth expresses the desire to live, to expand, to grow, to increase, counteracting the economic contractions of the recent Night Cycle – the desire to die, to shrink, to escape one’s shame -- expressed in the depressions of 1819 and 1837. A new sense of national mission – of a covenant with God – would be expected as an inherent compact within this rebirth. Manifest Destiny was just such a seed-idea.

Noon 1821

Dusk 1830

Midnight 1839

Essentially Manifest Destiny was a second Declaration of Independence from European powers (and Mexico). The doctrine of Manifest Destiny stated that the North American continent south of Canada and north the Rio Grande River belonged to the United States of America; and any attempt by a foreign power to abrogate this right of ownership would be met by the use of American military force. It was America’s destiny to expand westward. Not only was westward expansion required for social, political and commercial reasons, but God was also calling on the people of the United States to expand ‘the borders of freedom’, to impart their ideals and belief in democratic institutions to other people capable of self-government.

The covenant with the New Jerusalem, which we will discover as a seed-idea in Puritan and colonial America, appears again and again as justification for American expansion, a call to American expansion, American empire. God has chosen America to be the bringer of light and civilization to the world, even to those parts of the world that may not yet appreciate the gift of light and civilization (this includes, of course, to the immediate west, a wide variety of Native American tribes and possibly outposts, fortifications and provinces of Mexico).

The first appearance of the expression ‘Manifest Destiny’, as far as I can tell, was in 1845, in The United States Magazine and Democratic Review in an article by John L. O’Sullivan, who wrote ‘the fulfillment of our manifest destiny to overspread the continent allotted by Providence…’ The term ‘Manifest Destiny’ became popularized by politicians and journalists after that as the religious duty for America to spread her influence throughout the world.

The Soul born at Midnight, which becomes the Renaissance Man at Dawn, is the ‘Annointed’ of God, the miraculous New Sun, the purveyor of God’s laws over the Earth. The ‘Chosen One’. The force of a New Order overthrowing the Dark Element of an Old Idea.

Dawn is a warrior for order, light and the spread of civilization.

In 1846, the Mexican-American War begin With the Battle of Palo Alto. In this process, Texas was ‘freed’ from Mexico, New Mexico was annexed from Mexico, and American settlers in California proclaimed an independent Republic of California, which was annexed in to the United States in august of that same year.

Midnight 1839 – Business Expansion begins.

Dawn 1848 – Business Bubble accelerates.

Noon 1857 – Business Expansion ends: Chaos Begins.

Expansion of light begins at Midnight; but it begins very quietly. Light is a child at Midnight, weak, vulnerable, protected by the Darkness. But this expansion gains momentum and runs like a train, eventually, to its maximum extension, Noon – at which time it falls back to earth.

Donald J. Mabry, in his article ‘Economic History, 1843 -1857’ describes the vigorous American expansion of this Day-Cycle. The inflation of the masculine Ego bubble brings inflated prices, an inflated sense of national mission, and an inflated masculine power that brings conflict to the world. (As the symbolism of the erection indicates, the power of this type of erotic expansion is periodical and limited.)

From 1843 to 1857, the market economy showed what it could do without a major economic depression. The results were impressive. In the 1844-1854 period, the total value of all commodities rose 69%. In the 1840s, output per worker rose an average 10% in the 1850s, 23%. In part, it was simply a further acceleration of the market economy after the 1837-1843 depression. 
   

Commercial agriculture grew faster than ever. By 1846, the formerly protectionist Northwest was exporting so much wheat to foreign markets that it became a free trade area and voted for low tariffs in 1846. By 1850, the Northwest exceeded the Northeast in wheat production with as the wheat growing areas moved into Wisconsin, Iowa, eastern Kansas and Nebraska. The use of the mechanical reaper pushed wheat production from 30 million bushels in 1850 to 100 million in 1860. Meat packing and the production of corn and hogs was almost as spectacular. In the South, in the 1840s, cotton production increased 60% and, in the 1850s, increased 100%. The increasing productivity and profitability brought an increase in slave prices as plantation owners, faced with labor shortage, competed with each other for workers. In the 1790s, a prime field hand sold for $300; by 1840, the amount was $1,000; and by 1860, $1,500. Some of this price increase was simply inflation but the figures indicate that the prices were climbing. 
   

The growth of regionally-specialized commercial agriculture was closely tied to the development of a national system of transportation and communication. The railroad network created in the 1850s brought the railway system to full efficiency. In the 1840s, there were only 6,000 miles of track in the nation, by 1852, there were 12,000 miles; and, by 1860, there were 30,000 miles. By 1857, one billion dollars had been invested in railroads, two-thirds during 1850-1857. By the early 1850s, the completion of 5 trunk lines connecting Boston, New York, Philadelphia, Baltimore, and Charleston with Ohio and Mississippi by way of Albany, Buffalo, Pittsburgh, Wheeling, Atlanta, Chattanooga and on to Chicago, St Louis, and Memphis. One could go from the Atlantic Coast to Chicago or St Louis in two days for $20. Numerous feeder lines meant that even more locales could use railroad transportation. 
   

American exports grew from $144 million dollars in 1850 to $334 million in 1860, but imports were greater than exports . The trade deficit grew from $5 million in 1850 to $58 million in 1860 and was met by the exportation of gold. 
   

Immigration surged upwards, especially from Ireland and the German-speaking parts of Europe. Before 1825, there were 10,000 immigrants yearly. By the mid-1840s, ten times as many or 100,000 a year were coming. By the early 1850s, the number had reached 400,000 a year. In the 1844-1854 period, 3 million immigrants came. They did factory work, the dirty work in railroad and canal construction, domestic service, and any other jobs that they people who were already in the US would not do them. The Germans tended to settle in the Mid West; the Irish tended to stay in the Northeast. The Irish started displacing the women who worked in New England and other Northeastern factories. So many came that strong resentment against them grew in many places. A common expression about the Irish was "it's a good thing the wheelbarrow was invented; it taught the Irish to walk on their hind legs." 
   

Their coming to the United States helped grow the economy. Immigration is a subsidy of the receiving country. Most people do not realize this. From the time a child is born until he or she immigrants, people had to pay to raise that child. In other words, a capital investment is made. When the person immigrates, then the country to which the person goes gets the benefit of that capital investment while the sending company loses it. So immigration represents a source of wealth for the receiving country. That immigrants tend to be healthy, ambitious people means that the investment is worth a great deal to the receiving country. 
   

The rounding out of the vast and lucrative market set the stage for the Industrial Revolution to occur in the US. From the 1850s on, industry was the motor for economic expansion. Large-scale factory production had been developing since the War of 1812. There was such growth in the 1840s that, by 1850, the value of manufactured products exceeded the value of agriculture. From 1850 to 1860, the value of manufactured goods went from just over $1 billion to just under $2 billion. The value added by manufacture rose 157% from 1839-1849. From 1844-1854 it rose 134%. 
   

Cotton textiles were the pioneer industry. Samuel Slater learned in his native Britain about Arkwright's spinning and carding machines; he immigrated to the US in 1789 and built similar machines from memory. In 1793, he created the first US cotton mill in Pawtucket, Rhode Island. The industry boomed during the War of 1812 because demand increased and imports were difficult to obtain. Successful merchants saw the profits and began investing money in manufacturing. In Massachusetts in 1813, Francis Cabot Lowell headed a group who founded the Boston Manufacturing Company in Waltham, Massachusetts with $600,000. It used an efficient power loom and spinning machine he had created with another man. His mill was probably the world's first mill in which were performed all operations converting raw cotton into finished cloth. This system spread to wherever water power was available. It used the assembly line techniques developed by Eli Whitney of Connecticut. The assembly line technique spread to other products, hog butchering and packing being one example. 
   

The iron industry grew to meet the demand for new machines. Railroads were big consumers as the locomotives and railroad cars were made of iron and ran on iron rails. Iron was strong and malleable as increasingly was used in machines. 
   

By the 1840's , manufacturing was not as dependent upon waterfalls; stationary steam engines allowed the location of factories in cities. With that development, cities began to grow rapidly as working families flocked to them and others went to sell them products. By 1860, greater New York City had over one million people. Sizable cities such as St Louis and Cincinnati had come on the old frontier. 
   

With the rise of industry came a new working class. Lowell hired farm and small town girls to work in his factory. These Waltham Girls were carefully supervised at work and at leisure so their parents would let them leave home. Many sought to earn enough for a dowry; others supplemented the family income. For most industrial workers, wages were low, hours were long, employment was tenuous, working conditions were hard, and living conditions were bad. Some workers tried to organize unions to improve the situation but the constant stream on immigrants, who would accept any condition, meant that unions were rarely effective. 
   

As a greater percentage of men were working in factories rather than on farms, the ability of men to raise their children declined. Farming allowed men to raise children, for he could keep an eye on them, but, unless his child worked in the same factory, a father had little opportunity to see his child. Often, the child worked under a foreman in a different place than the father. Industrialization, although it had many social and economic benefits, meant that men who loved their children had to leave them to others to raise. 
   

Men, women, and children were willing to pay the price for the economy was the most prosperous the country had ever seen. Farm work involved very long hours for everyone, hours shortened only by darkness. Children had chores. One of the reasons to have children was that they consumed less than they produced. Factory work differed because the work day did not shorten or lengthen with the seasons. Here, too, most members of a family, if not the entire family, worked. The payoff was a higher standard of living. Immigrants flocked to factories and mines; the jobs that had to be done did not require much English. They also flocked to farming communities which used free labor; they tended to stay away from the South since they did not want to compete with slave labor. 
   

With prosperity, people were generous; there seemed to be more than enough to go around. Sectional tensions were at a low ebb. The US Congress gave away 18 million acres of land to railroad companies between 1850 and 1860 to get transcontinental railroads built. The South, which believed cotton was king, supported railroad construction because it wanted to get cotton to markets. Industrial expansion did well even under the low tariff of 1846, which had been supported by agrarian interests. Settlement was expanding as Americans went westward, some across the Oregon Trail. The Mormons had to leave the US in 1846-47 to find refuge in Mexico but the Mexican War (1846-48) swallowed Utah as part of the Mexican Cession. The gold strike in 1849 near San Francisco encouraged thousands to go to California. The cotton frontier was expanding westward into the Mississippi Delta region and further westward into eastern Texas.

As we have stated before, Noon represents the ultimate outward expansion (materialization) of an idea (manifest destiny, for instance) or an energy (positive, externalized), followed by the loss of momentum, and the collapsing back toward earth (gravity). We expect economic crisis to mark this fall of the Solar Hero, as expansion turns in to contraction. (The diameter of the circle runs from one side to the other side, dividing the circle in half, and then disappearing back in to the unified circle when the bubble expansion has created ultimately pops.)

Midnight 1839 – Business Expansion begins. Chaos begins to end.

Dawn 1848 – Business Bubble accelerates.

Noon 1857 – Business Expansion ends: Chaos begins.

Dusk 1866 – Business Contraction accelerates.

Midnight 1875 – Business Expansion begins. Chaos begins to end.

The Panic of 1857. America did have an economic panic that began in 1857; this led into the Dark Half of the 18 year cycle (the Night-Cycle) which led, shortly thereafter, into the American Civil War.

J.S. Gibbons writes in The Banks of New York, Their Dealers, the Clearing-House, and the Panic of 1857.

The major financial catalyst for the panic of 1857 was the August 24, 1857, failure of the New York branch of the Ohio Life Insurance and Trust Company. It was soon reported that the entire capital of the Trust's home office had been embezzled. What followed was one of the most severe economic crises in U.S. history.

Almost immediately, New York bankers put severe restrictions on even the most routine transactions. In turn, many people interpreted these restrictions as a sign of impending financial collapse and panicked. Individual holders of stock and of commercial paper rushed to their brokers and eagerly made deals that "a week before they would have shunned as a ruinous sacrifice." As the September 12, 1857, Harper's Weekly described the scene on the New York Stock Exchange, "…prominent stocks fell eight or ten per cent in a day, and fortunes were made and lost between ten o'clock in the morning and four of the afternoon."

The Report of the Clearinghouse Committee, produced in the years following the panic of 1857, found that "A financial panic has been likened to a malignant epidemic, which kills more by terror than by real disease." Yet behind the reaction of New York's bankers to the closing of a trust company lay a confluence of national and international events that heightened concern:

The British withdrew capital from U.S. banks; grain prices fell; Russia undersold U.S. cotton on the open market; manufactured goods lay in surplus; railroads overbuilt and some defaulted on debts; land schemes and projects, dependent on new rail routes, failed.

To compound the problem, the SS Central America, a wooden-hulled steamship transporting millions of dollars in gold from the new San Francisco Mint to create a reserve for eastern banks, was caught in a hurricane and sunk in mid-September. (The vessel had aboard 581 persons—many carrying great personal wealth—and more than $1 million in commercial gold. She also bore a secret shipment of 15 tons of federal gold, valued at $20 per ounce, intended for the eastern banks.)

As banking institutions of the day dealt in specie (gold and silver coins instead of paper money) the loss of some thirty thousand pounds of gold reverberated through the financial community. Howell Cobb, secretary of the treasury, encouraged not only the placement of vast amounts of such government gold on the market, but also redemption of government bonds at a premium. At his suggestion, President James Buchanan proposed to Congress that the Treasury be authorized to sell revenue bonds for the first time since the Mexican American War.

Although bankers showed the first signs of concern, depositors soon followed. On October 3 there was a marked increase of withdrawals in New York, and over the next two weeks withdrawals nearly quadrupled. Reports of financial instability, perhaps exaggerated, were quickly carried between cities by the new telecommunications medium, the telegraph.

As the public's faith in soundness of financial institutions continued to plummet, the nation's banks began to collapse. Although the East Coast was hardest hit—with bank closures in New York, Philadelphia, Baltimore, and elsewhere, bank failures also reached across the Missouri River to cities such as Omaha. The climax came on October 14, ”Suspension Day, when banking was suspended in New York and throughout New England.

The term panic refers to the worst moments of a financial crisis. What follows is frequently a recession (a period of reduced economic activity) or a depression (a more serious and prolonged period of low economic activity, marked especially by rising unemployment). The contraction of the economy that followed the panic of 1857 was profound and had parallels in Europe, South America, South Africa, and the Far East causing it to be held as the first worldwide economic crisis.

In the U.S., the setback caused significant job loss; a major slowdown in capital investment, commerce, land development, and the formation of unions, as well as in the rate of immigration. The effects of the "revulsion," as it was referred to at the time, lasted a full eighteen months and reverberated until the onset of the Civil War.

Harper's Weekly, for September 12, 1857, took a dim view of dealings on the New York Stock Exchange. They claimed that the greed of speculators underlay the panic and gave examples that included the following:

…Jones believes that we are going to have a "crisis," a "revulsion," and "panic." Or Jones is treasurer of the New Gauge Railway, and having access to the books, knows that it is insolvent. In both these cases Jones directs his broker to sell for his account so many shares of the New Gauge Railway…retaining the right of delivering the stock on any day he pleases prior to the conclusion of the contract. Of course, Jones doesn't own the stock he sells; he intends to buy it at a reduced price at the time he delivers. Now, if Jones has been right in his prognostications — if the panic and crisis do come, or if the New Gauge Company does turn out to be insolvent, of course the stock goes down, and Jones buys in for delivery at the reduced price, realizing the difference between that price and the one at which he sold. But if Jones has been wrong — if the crisis don't come, or is unduly postponed — such things have been known to occur — if the New Gauge concern should prove profitable, and not insolvent, why then the stock might go up, and at the end of the contract Jones might be forced to buy for, say $50, that which he sold at $45 — netting a loss of $5 per share.

In the late 1880s the wreck of the SS Central America was located about 8,000 feet under water. One ton of extraordinary riches surfaced including the world's largest bar of gold ingot, weighing more than eighty pounds, and thousands of 1857-S Liberty Double Eagle twenty-dollar gold pieces, each of which contained nearly a full ounce of gold.

Gibbons speculates the world-wide financial crisis lasted for18 months (again the number 18). My thesis, of course, is that the period of chaos and depression lasted much longer, from 1857 – 1875: 18 years. Historians tend to think of history as a succession of unconnected (or loosely-connected) events. Discrete happenings: here today, gone tomorrow. A connecting theory or structure of history will enable historians to organize isolated incidents into a fabric of causes for better understanding cycles in history.

Historians seem to agree that there was a Panic of 1857, a Panic and Depression of 1869-1871, and a Panic of 1873. My argument is that these depressions were all part of the same general phenomena: the Night-Cycle of the deflating Masculine Ego bubble. Life expands; Death contracts. Heat expands; cold contracts. Life constructs the Tree of Life; Death de-constructs the Tree of Life, returns energy to the soil, returns to its Winter roots.

à 1873

The Long Depression was a worldwide economic crisis, felt most heavily in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution and the conclusion of the American Civil War. At the time, the episode was labeled the Great Depression, and held that title until the Great Depression of the 1930s. Though a period of general deflation and low growth began in 1873, (ending about 1896) , it did not have the severe "economic retrogression [and] spectacular breakdown" of the latter Great Depression.[1]

Because of the large increases in U.S. industrial production, GNP and real product per capita, economic historians have questioned whether there was really a U.S. depression in anything other than profits.[2]

It was most notable in Western Europe and North America, at least in part because reliable data from the period is most readily available in those parts of the world. The United Kingdom is often considered to have been the hardest hit; during this period it lost some of its large industrial lead over the economies of Continental Europe.[3] While it was occurring, the view was prominent that the economy of the United Kingdom had been in continuous depression from 1873 to as late as 1896 and some texts refer to the period as the Great Depression of 1873–96.[4]

In the United States, economists typically refer to the Long Depression as the Depression of 1873–79, kicked off by the Panic of 1873, and followed by the Depression of 1893, book-ending the entire period of the wider Long Depression[1]. The National Bureau of Economic Research dates the contraction following the panic as lasting from October 1873 to March 1879. At 65 months, it is the longest-lasting contraction identified by the NBER, eclipsing the Great Depression's 43 months of contraction.[5][6] After the panic, the economy entered a period of rapid growth, with the U.S. growing at the fastest rates ever in its history in the 1870s and 1880s.[7]

Miriam Medina writes in her article ‘The Panic and Depression of 1869-1871’:

The New York Stock Exchange rose to a position of real prominence only after the Civil War. In the 1860’s the United States was not on the gold standard. Monetary values were expressed in terms of paper money.

Gold was scarce, and the scarcity resulted in high interest rates. By 1869 the federal treasury held in reserve $95,000,000 in gold, but only $15,000,000 worth of the precious metal circulated throughout the country. Even at that time the fact that it did not deal in gold as a commodity threw a great part of the community's highly speculative business over to the Gold Exchange, which was formed for that purpose exclusively.

The Gold Exchange was established in 1864 on the corner of Broad Street and Exchange Place. The dramatic incident of this period was the gold panic on Black Friday in September, 1869, when a combination of several unscrupulous speculators, among them James Fisk, Jr., and Jay Gould, attempted to corner and put to extravagant figures the gold supply of the market. Operations on the Stock Exchange proper at that time were largely made up of the personal struggles of rival capitalists, notably in connection with the Erie and New York Central railroads.

The completion of the Pacific Railway (1869) caused extensive speculation in shares of the two transcontinental railways, and as capital increased and the railway mileage of the country extended the transactions of the Exchange became of a national rather than provincial character. The leading operators of that time were Gould, Fisk, Daniel Drew, Cornelius Vanderbilt and their associates. None of the capitalists named was accustomed to trade personally on the Stock Exchange; indeed, such a practice has always been the rare exception among active financiers.

 BLACK FRIDAY: The term is often used to designate a dark financial day. September 24, 1869, is sometimes referred to as Black Friday in the United States. On this day a syndicate of New York bankers advanced the price of gold to 162 1/2, causing a panic. It sold at 143 1/8 the previous evening. The Grant Administration dumped $4,000,000 in gold on the market, the price falls in fifteen minutes from 162 to 133, and many investors were ruined. Fortunes were lost. Wall Street brokerage houses failed. Railway stocks shrank. The nation's business was paralyzed. Another such day was Friday, Sept. 19, 1873, when Jay Cooke & Co., leading American bankers, failed. A great crash ensued in Wall Street, the center of financial operations in America, and the historic panic of 1873 began. Credit generally was impaired and many financial institutions were forced into bankruptcy.

Ms Medina also writes about the ‘Panic of 1873’.

The Panic of 1873 begins another period of [American] depression. The economy is in fact over-expanded, particularly in railroad construction, and the weak link turns out to be the banking house of Jay Cooke and Company, which helped the U.S. Government finance the Civil War and also underwrote the construction of the Northern Pacific Railroad. Jay Cooke and Company, a large and respected banking house declares itself bankrupt, and announces its failure on September 18, 1873. (The bank's collapse precipitates the "Panic of 1873" and the ensuing three year depression during which more than 10,000 businesses fail.)

The basic economic problems are overproduction, a declining market and deflation. Investors in Europe, where a depression is already underway, begin to call in American loans. The New York Stock Exchange closes its doors for 10 days; other businesses fail; and railroad construction is curtailed, with some railroads defaulting on their bonds. The unemployed begin to move about the country seeking jobs, and bread lines appear in the cities. The hard times drove numbers of laboring people and those in humble circumstances to the West and other portions of the country, to seek the rewards which the stagnation of business in the great commercial centre denied them.

This does not mean that the depression was the only reality from 1857 through 1875, or in any Night-Cycle experience. Light (the energy of erection – anti-entropy) and Darkness (the energy of de-construction – entropy – or impotence, if a lack of energy can be expressed as a type of introverted energy) always exist together. But from 1857 through 1875, the energy of deconstruction was stronger than the energy of construction.

Light struggles with Darkness during the Night – but Darkness wins. Darkness struggles with Light during the Day – but Light wins. Ego-Deflation cycles are not without attempts at Ego-Inflation. Ego-Inflation cycles are not without attempts at Ego-Deflation. Gravity is stronger than Levity during the Night cycle. Levity is stronger than Gravity during the Day cycle, when man flies above the earth.

Words are limited in expressing these concepts clearly (since the spirit has more levity during the Night that during the Day, but the body has more levity during the Day that during the Night). Words are tools for sketching this process; but words can be misunderstood. Words also have a substance and a shadow side.

I also do not want to give the impression that economic panics happen only during the Night-Cycle of history, during the decline of the Male Principle. One of the greatest ‘panics’ in American history occurred in 1987, during the heart of the ‘Reagan Miracle’. In one day in 1987, ‘Black Monday’, the Dow Jones Industrial Average lost 22% of its value. But, within a week, the market had bottomed, and buyers had returned to the market, pushing prices back up again. There are negative incidents in Day-Cycle bullish periods, panics, sell-offs – but these incidents do not end the larger trend. There was negative growth in the economy in 1953-54; but the overall electric-energy of the era was positive.

There are ‘nights’ during the Summer-Cycle; but these nights are weak and short. There are ‘days’, during the Winter-Cycle; but these days are also weak and short.

The American Civil War, which began in 1861 and ran into 1865, was the ultimate act of de-construction, in that it pitted brother against brother (Apollo against Dionysus), over the issue of secession, or divorce, or dismantlement of a country. De-construction. Civil War is the ultimate chaos a society can experience.

The Civil War had many surface causes – urban trade of northern cities versus agrarian systems of the south – England against France again – Civilization against Culture again – but it also had at its heart the ‘romantic’ issues of racial inequality, slavery, and feminism. ‘Equality’ are always issues that move the Romantic – and ‘equality’, the balanced scales, is the sign of Libra in the zodiac, which occupies the position of the Dusk, the Romantic Autumn.

The 1850’s and 1860’s were very fertile times for America’s emerging national ‘Romantic’ culture. Literature saw the rise of Melville, Hawthorne, Thoreau, Whitman. Harriet Beecher Stowe’s book Uncle Tom’s Cabin moved people all over the world to the plight of America’s slaves.

The expansion of Life (the Day Phase) is about God’s Will – what the Bible says. The contraction of Life (the Night Phase) is about Humanity’s Will, about Humanism, Man’s sense of justice.

The Day is monotheistic at heart, tyrannical in the extreme, and autocratic by nature. Why is this so? The Day is ruled by One Heavenly Force, the Sun. Occasionally a dim image of the Moon can be seen floating by, seemingly dead, ghostly, incomplete, without power or presence.

If one studies the heavens at Night, in contrast, one sees a whole range of planetary and stellar forces (described as divinities by ancient cultures). The Moon is the closest and the largest of the heavenly bodies; but there are myriad stars in the sky, all demanding recognition. There is a heavenly circle of constellations which the human mind conceived as a girdle, or circle of houses, through which the Sun passed in its annual journey through the heavens. Man was blind of the heavens during the Day; man had no soul during the Day. The Sun was so blinding that man lost his sense of the magnificent expanse of Nature. Man’s own nature expanded so much during the Day that it blotted out God and the heavens. Man actually believed he was God during the Day, his pride making of him reflection of the Sun God – and this was his great sin, this pride – from which he must eventually fall. Mister Greenspan became a symbol of this, of course. It is my thesis that he has been our Ahab, that America is the Pequod, that God manifests as the Great White Whale (White and Black by turns, as the yin-yang symbol portrays it); and that we are all heading down to the bottom of the sea, after the White Whale has stove-in the Ship of State, punishing the crew (all of us) for the transgressions of its captain.

The Day is monotheistic, reflecting belief in the Great One God, the Sun. It is a time of the Outer Body, animated and ‘expanded’ by the Spirit. It is the time of the Chosen People, the Covenant, Conquest, Triumph, Wealth. The Day ultimately desires a monarchy, desires a government not of equal men, but of a replica of the Sun, itself, a Man-God-King who rules with an iron hand, the archetype of the Patriarch. This rule is based in the worship of Man-above-Nature, in the Man’s conquest of Nature, and in the Worship of Material Reproduction (the conquest of land and gold). The Sun is generally the only (easily visible) heavenly body during the Day.

The Night is polytheistic and pantheistic (pagan, if you will), reflecting belief in a plurality of gods, the Moon and Stars, the cosmic forces of Nature. Orthodox Christianity dismisses this sequence as Paganism, which is demeaned as a kind of Nature-Worship (female gods). It is a time of the Inner Body, the Dream Body, animated and contracted into Spirit. It is the time of the death of the Outer Body, Judgment Day, Man Meeting His Maker, Crucifixion, Purification, Holiness, and, ultimately, of Rebirth. The Night, ultimately, at its extreme, also desires a monarchy (Moon Ark Key), desires a government not of equal men, but of a replica of the Moon, a Matriarchal rule, based in the worship of Nature and in the Worship of Sexual Reproduction, with the woman on top and the man a weakened (impotent) accessory. (As I have written, we will also find ‘feminism’ as a radical culture also at its most power at this stage of Midnight, Capricorn, Winter Solstice.)

The Night is ‘religious’ is the mystical sense, a living God moving among tribal societies, imparting laws and lessons of wisdom through God’s manifestation through Nature. Shamen, priests, prophets, poets and artists are all considered close to God, messengers of God, and are honored in the Night-Cycle society.

The Day is ‘religious’ in the non-mystical sense of a written code of Law and a priesthood that enforces a relatively rigid code of comprehension of this written Law. The living religion of Night is replaced by the historic religion (the written text) of an ancestral reality. Prophets are scorned, arrested or labeled lunatics during the Day-Cycle of empire.

Prophets, shamen, mystic priests, artists and poets lead the society back to God in the Dusk; and they lead the society into the light, away from the darkness at Dawn. But, like Moses, they do not enter the Promised Land themselves, the Land of Light and Wealth and Milk and Honey. They wait behind at the place where the two worlds meet, their work never done, leading some to light and some to darkness, depending on their deeds and on the trajectory of their arcs.

The Dawn is essentially the same ‘man’ as the Dusk but with the difference that the Dawn has his back to the Darkness (the Moon) and his face to the Light (the Sun) and is moving toward the Father Light; the Dusk has his back to the Light (the Sun, the Father) and his face to the Darkness (the Moon) and is moving toward the Darkness, the Mother, the Source of his Life and the seedbed of his new life through Re-Birth.

The Dawn is a Republican in the pure sense of the word – a believer in the Republic. The Dusk is a Democratic in the pure sense of the word – a believer in the Democracy.

The Republic – i.e, democracy of, for, and by the aristocracy -- is the domain of the Renaissance Man (the ‘enlightened’ Mercantile Renaissance Man at Dawn moving away from Religion and toward Science, embedded in Humanism. Democracy (considered ‘Mob-ocracy’ by many republican aristocrats) – i.e., democracy of, for, and by the equal masses of men and women – is the domain of the Romantic Renaissance Man at Dusk, also embedded in Humanism, moving, in his mind at least, away from the City, from Civilization, back toward Nature, moving back toward Religion, back toward the Earth). Democracy only exists when the two primordial forces exist in a relatively balanced state of wholeness as the middle principle – the Human Principle, and Humanism -- between the two extremes of Sun or Male Monarchy (Patriarchal Fascism) and Moon or Female Monarchy (Matriarchal Communism).

To the extent that the monotheists (monarchists) persecute the pagans (peasants, Goths) (those who have no physical body to defend themselves, technology also being an extended form of the body) indicates just how much suffering the monotheists will have to endure once they lose their bodies and become, themselves, now defenseless, residents in the land of the Night, the polytheists, as karmic law animates the piper who plays a love song for the Goddess Nemesis.

Note in the diagram, the number 7 is the end of manifestation in matter (spirit materializing) at Noon (in Cancer) and also the end of manifestation in spirit (matter spiritualizing) at Midnight (in Capricorn). 7 of course is the last Day of Creation, the Sabbath, the Great Day of the Lord (Saturn-Jehovah) at which time all activity stops.

I do not wish to leave this time period without saying something about the great Abraham Lincoln. I have said that a Father Figure almost always dies or is wounded at or near the Noon Hour of the Time-Cycle. John Kennedy is martyred near the Noon-Hour in 1963.

Noon 1965

Dusk 1974

Midnight 1983

Abraham Lincoln is martyred near the Noon-Hour in 1865 (actually closer to the Dusk-Hour).

Noon 1857

Dusk 1866

Midnight 1875

Dawn 1884

Our earlier characterization of the Positive-Electric Time Periods as being ‘Cowboy’ periods and the Negative-Electric Time Periods as being ‘Indian’ periods, makes the phenomena of Lincoln and Kennedy (as symbols) somewhat hard to place. Was Abraham Lincoln a Cowboy or an Indian? Which was John F. Kennedy?

Another way of looking at this – with less onus on individuals and the place(s) they inhabit on the electrical arc – is to look at both sides of the cycle in terms of the journey of the Sun Hero, whose ascension is to provide light and life for the world and whose descent creates discord, poverty, political conflict and social chaos.

John Wilkes Booth is clearly an emanation of the Dark Brother, Set in Egyptian mythology, who murders his brother Osiris and sends Egypt into an era of loss, mourning and prayers for resurrection.

Lee Harvey Oswald is a similar figure, dark, lonely, alienated. It is not clear to me that Lee Harvey Oswald did kill John Kennedy. It seems much more likely to me that rogue forces of the FBI, the CIA, in collusion with the mafia killed John Kennedy. Perhaps some day we will know the truth about this.

Both Lincoln and Kennedy appear as Sun Heroes, both murdered by the forces of chaos and disintegration. Lincoln devoted his life (and gave his life for) the concept of the Union – Unity, the mystical marriage of the two opposing forces. The Civil War was a graphic picture of the symbolic rupturing of that mystical marriage by the forces of chaos.

John Kennedy was, in many ways, the archetypal Sun Hero. Handsome, young, intelligent, a bright light in the world, who was killed by the forces of polarization. Kennedy’s death threw America in to the most polarized chaotic time it had experienced since the death of Lincoln.

There is an odd phenomena at work in the biography of North and South, Heaven and Earth, Heaven and Hell, Light and Darkness. We know that when it is Summer in the North it is Winter in the South; and when it is Winter in the North it is Summer in the South. These forces are not stationary but are in constant movement, pulling away from one another for a time; then drawn toward one another by the law of attraction.

Spring (Dawn) and Autumn (Dusk) are the two times during the Sun’s annual journey that these forces of Light and Darkness meet. The Northern Autumn is the Southern Spring – and, as such, at this time the Southern force kills the Northern force and takes his place in Heaven, although moving in a counter-direction through the heavens. When the North becomes dark, the South becomes light. When the North becomes light, the South becomes dark.

The North moves ever in a clockwise direction; the South ever in a counter-clockwise direction. It is proclaimed, through this Law of Nature, that North and South will ever see the world from both different perspectives and also from different angles of momentum.

Interpretation of reality will always be trained through a different lens because of this dynamic of polarity.

When the East says: “It’s Day”, the West will counter “No, it’s Night.” When the North says: “It’s Summer”, the South will always counter “No, it’s Winter.” These four forces will always run from counter directions, with counter perceptions. A truly unified Earth will never be possible because of this.

Myth never happened but always is.

Sallust, Gods and the World

CHAPTER TEN.

TIME CYCLES IN AMERICAN HISTORY, CONTINUED

(The Falcon cannot hear the Falconer)

  Turning and turning in the widening gyre 
   

The falcon cannot hear the falconer; 
   

Things fall apart; the centre cannot hold; 
   

Mere anarchy is loosed upon the world, 
   

The blood-dimmed tide is loosed, and everywhere 
   

The ceremony of innocence is drowned; 
   

The best lack all conviction, while the worst 
   

Are full of passionate intensity.

W.B. Yeats – ‘The Second Coming’

I have written that my main focus in this book is on the predictable contraction periods when structures collapse or come under attack by the forces of chaos (entropy) – or, in W.B. Yeats famous words: ‘Things fall apart: the centre cannot hold.’

But that is not our only focus. We also expect to see significant evidence of national modes of expansion and unity during the Day-Cycles of American history.

Expansion is supposed to occur in the Cowboy Cycle (Midnight – Noon), it might be interesting to see in which phases the majority of expansions of the American borders have occurred over the last 250 years.

Dawn 1776 – Original expansion: American Declaration of Independence.

1782-3: Treaties with Britain to establish the United States. as an independent country being bound on the north by Canada, on the south by Spanish Florida, on the west by the Mississippi River, and on the east by the Atlantic Ocean.

Noon 1785

Dusk 1794

Midnight 1803: The Louisiana Purchase (bought by Thomas Jefferson from France) extends the western

boundary of the United States to the Rocky Mountains. The Purchase doubles the territory of the United States.

1810: President James Madison declares West Florida a U.S. possession.

1810: Tristan de Cunha first overseas possession claimed by the U.S.

Dawn 1812

1818: A convention with Great Britain established the northern boundary of the Louisiana Purchase at 49 degrees north.

1819: Florida was ceded to the United States and purchased from Spain.

1820: Maine became a state, carved out of the state of Massachusetts. The northern boundary of Maine was disputed between the U.S. and Canada so the King of the Netherlands was brought in as an arbiter and he settled the dispute in 1829. However, Maine refused the deal and since Congress requires the approval of a state legislature for boundary changes, the Senate could not approve a treaty over the border. Ultimately, in 1842 a treaty established the Maine-Canada border of today although it provided Maine with less territory than the King's plan would have.

Noon 1821

Dusk 1830

Midnight 1839

1845: The independent Republic of Texas (1836-1845) is annexed to the United States. The territory of Texas extended north to 42 degrees north (into modern Wyoming) due to a secret treaty between Mexico and Texas.

1846: Oregon Territory is ceded to the U.S. from Britain following an 1818 joint claim on the territory. The Treaty of Oregon establishes the boundary at 49 degrees north.

Dawn 1848: The Treaty of Guadalupe Hidalgo following the Mexican War between the U.S.

and Mexico resulted in the purchase of Arizona, California, Nevada, New Mexico, Texas, Utah, and western Colorado.

1853: With the Gadsden Purchase of 1853, the land acquisition that resulted in the area of the 48 contiguous states today was completed. Southern Arizona and southern New Mexico were purchased for $10 million and named for the U.S. minister to Mexico, James Gadsden.

1856: Guano Islands Act. U.S. claims Baker Island, Howard Island, and Navassa Island.

Noon 1857

Dusk 1866

1867: Alaska was purchased from Russia for $7.2 million in gold. Some thought the idea was ridiculous and the purchase became known as Seward's Folly, after Secretary of State William Henry Seward. The boundary between Russia and Canada was established by treaty in 1825.

Midnight 1875

Dawn 1884

Noon 1893

1898: Hawaii was annexed into the United States. Puerto Rico, Guam, the Philippines and Cuba ceded from Spain at end of Spanish-American War.

1899:

Dusk 1902

Midnight 1911

1917: United States Virgin Islands bought from Danes.

Dawn 1920

1925: The final treaty with Great Britain clarifies the boundary through the Lake of the Woods (Minnesota), resulting in the transfer of a few acres between the two countries.

Noon 1929: American Samoa made a formal territory of the U.S.

Dusk 1938

Midnight 1947: Marshall Islands, Federated Islands of Micronesia, Northern Mariana Islands, and Palau

Formalized under U.S. trusteeship.

Dawn 1956

Noon 1965

Clearly more physical expansions in American history have occurred during the 18-year cycles I have called Day Cycles or Cowboy expansions. I would also expect to see higher birth rates during these Midnight-Noon cycles. But finding statistics on this is not always easy. The statistics I did find do indicate a higher per-capita birthrate during the expansion cycles than during the contraction cycles, although the birth-rates during the expansion cycle from 1983 – 2001 seem very low.

Midnight 1911 – Noon 1929: 511

Noon 1929 - Midnight 1947: 385.5

Midnight 1947 - Noon 1965: 455

Noon 1965 – Midnight 1983: 310

Midnight 1983 – Noon 2001: 290

I would also expect to see a higher marriage rate and a lower divorce rate during Expansion Cycles. I would expect lower crime rates during Expansion Cycles.

This has nothing to do with good and evil in the world. This has everything to do with creative forces in Nature, or types of energy: the breathing process in Nature that balances growth, expansion, and development (and over-development) in equal cycles of Activity and Rest.

Each soul spends time on both sides of this mountain, the bright expansive side, and the dark contractive side. The bright expansive side corresponds to the victory of the Ego in the world; the dark contractive side corresponds to the defeat of the Ego in the world. Every soul experiences both sides. The polarity that divides one side against another is not accidental, but it is also programmed. When the Soul (the Middle Principle) attaches itself to the Body (the Material World), then the Body defeats the Spirit. When the Soul attaches itself to the Spiritual World, the Material World is defeated, and declines. Human character requires that souls experience defeat. Without defeat, a soul develops no depth, staying on the surface of ego victory, skimming on the surface of life where the senses rule but where wisdom, understanding, and human values of the soul are almost impossible to find. Life provides each soul with some victories, but also with some tragedies, since the point of life seems to be the development of the soul, the development of character, the deepening of one’s nature. Too much obsession with the surface leads to Botox City, leads to Viagra Nation. Too much obsession with the surface leads to adults seeking to remain teenagers for ever. Plastic Surgery is a symbol of the hollow life, the plastic life, spent skipping on the surface of convention, amassing meaningless material possessions, seeking status, and titles. The soul uses up both worlds eventually and needs both worlds (fire and water) in order to stay refreshed and new.

When Ego-defeat does come, the soul needs to drink deep from the dark water of sorrow and disappointment. Alchemists say that the Elixir of Life is found in the darkest part of one’s defeat. Mystics say the Fountain of Youth is found in the most hidden parts of one’s soul, in the void, in the quiet lonely spot on the inside of life. Time is precious. One needs to cultivate both the light and the darkness. Worldly status, fame, riches are a part of life, but not the entire story. These all turn sour if one stays on the surface too long. One needs to know when it is time to pull back, to take the plunge, to turn inside and seek the refreshment of the spiritual world, the refreshment of loneliness, depth, philosophy, poetry, the Night, the wisdom of dreams and quietude, found only in the shadow. Convention makes the world materially rich; eccentricity makes the world spiritually rich.

When the Male Principle is wounded and sinks in to the Feminine Element, a period of rest and germination results. But that is not the end.

In the same way that Osiris, the Fire, the Sun, dies and sinks into the Female Element, Water, Osiris travels on the dark water of death in a lonely boat of self-judgment, self-condemnation, and self-renewal. When he is born again, he is born as Horus, a new Sun, refreshed, re-made, and ready again for his journey into the heavens.

A few years ago Mikhail Gorbachev commented that Americans’ obsession with winning was pathological. Clearly, it is schizophrenic – because it denies the value of one half of existence. Victory is everything. But victory is not everything. Schizophrenia describes a split psyche: the broken nature rejecting the dark side of its own nature, the side the psche needs to make itself whole, to heal itself.

So, we have discovered that economic deflation and the Noon-Hour have been companions through much of the 1800’s in America. This was clearly the case from 1857 through the Civil War until about 1875. What about the next Night Cycle, 1893 – 1911?

Noon 1857 – Business Expansion ends: Chaos begins.

Dusk 1866 – Business Contraction: Chaos accelerates.

Midnight 1875 – Business Expansion begins. Chaos begins to end.

Dawn 1884 – Business Expansion accelerates.

Noon 1893 - Business Expansion ends: Chaos begins.

Dusk 1902 – Business Contraction: Chaos accelerates.

Midnight 1911 – Business Expansion begins. Chaos begins to end.

Right on time, 1893 marks the beginning of a period of world recessions. Not only was the depression on time, but social chaos also replaced the relatively prosperous period of the preceding Day-Cycle, 1875 – 1893. David O. Whitten writes in his article ‘The Depression of 1893’ about both the depression and the impressive growth of the preceding Day-Cycle (1875 – 1893):

The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade. This article describes economic developments in the decades leading up to the depression; the performance of the economy during the 1890s; domestic and international causes of the depression; and political and social responses to the depression.

The Depression of 1893 can be seen as a watershed event in American history. It was accompanied by violent strikes, the climax of the Populist and free silver political crusades, the creation of a new political balance, the continuing transformation of the country's economy, major changes in national policy, and far-reaching social and intellectual developments. Business contraction shaped the decade that ushered out the nineteenth century.

Unemployment Estimates

One way to measure the severity of the depression is to examine the unemployment rate. Table 1 provides estimates of unemployment, which are derived from data on output -- annual unemployment was not directly measured until 1929, so there is no consensus on the precise magnitude of the unemployment rate of the 1890s. Despite the differences in the two series, however, it is obvious that the Depression of 1893 was an important event. The unemployment rate exceeded ten percent for five or six consecutive years. The only other time this occurred in the history of the US economy was during the Great Depression of the 1930s.

Timing and Depth of the Depression

The National Bureau of Economic Research estimates that the economic contraction began in January 1893 and continued until June 1894. The economy then grew until December 1895, but it was then hit by a second recession that lasted until June 1897. Estimates of annual real gross national product (which adjust for this period's deflation) are fairly crude, but they generally suggest that real GNP fell about 4% from 1892 to 1893 and another 6% from 1893 to 1894. By 1895 the economy had grown past its earlier peak, but GDP fell about 2.5% from 1895 to 1896. During this period population grew at about 2% per year, so real GNP per person didn't surpass its 1892 level until 1899. Immigration, which had averaged over 500,000 people per year in the 1880s and which would surpass one million people per year in the first decade of the 1900s, averaged only 270,000 from 1894 to 1898.

Table 1
. Estimates of Unemployment during the 1890s

Year Lebergott Romer

1890 4.0% 4.0%

1891 5.4 4.8

1892 3.0 3.7

1893 11.7 8.1

1894 18.4 12.3

1895 13.7 11.1

1896 14.5 12.0

1897 14.5 12.4

1898 12.4 11.6

1899 6.5 8,7

1900 5.0 5.0

Source: Romer, 1984

The depression struck an economy that was more like the economy of 1993 than that of 1793. By 1890, the US economy generated one of the highest levels of output per person in the world -- below that in Britain, but higher than the rest of Europe. Agriculture no longer dominated the economy, producing only about 19 percent of GNP, well below the 30 percent produced in manufacturing and mining. Agriculture's share of the labor force, which had been about 74% in 1800, and 60% in 1860, had fallen to roughly 40% in 1890. As Table 2 shows, only the South remained a predominantly agricultural region. Throughout the country few families were self-sufficient, most relied on selling their output or labor in the market -- unlike those living in the country one hundred years earlier.

Table 2
. Agriculture's Share of the Labor Force by Region, 1890

Northeast 15%

Middle Atlantic 17%

Midwest 43%

South Atlantic 63%

South Central 67%

West 29%

Economic Trends Preceding the 1890s

Between 1870 and 1890 the number of farms in the United States rose by nearly 80 percent, to 4.5 million, and increased by another 25 percent by the end of the century. Farm property value grew by 75 percent, to $16.5 billion, and by 1900 had increased by another 25 percent. The advancing checkerboard of tilled fields in the nation's heartland represented a vast indebtedness. Nationwide about 29% of farmers were encumbered by mortgages. One contemporary observer estimated 2.3 million farm mortgages nationwide in 1890 worth over $2.2 billion. But farmers in the plains were much more likely to be in debt. Kansas croplands were mortgaged to 45 percent of their true value, those in South Dakota to 46 percent, in Minnesota to 44, in Montana 41, and in Colorado 34 percent. Debt covered a comparable proportion of all farmlands in those states. Under favorable conditions the millions of dollars of annual charges on farm mortgages could be borne, but a declining economy brought foreclosures and tax sales.

Railroads opened new areas to agriculture, linking these to rapidly changing national and international markets. Mechanization, the development of improved crops, and the introduction of new techniques increased productivity and fueled a rapid expansion of farming operations. The output of staples skyrocketed. Yields of wheat, corn, and cotton doubled between 1870 and 1890 though the nation's population rose by only two-thirds. Grain and fiber flooded the domestic market. Moreover, competition in world markets was fierce: Egypt and India emerged as rival sources of cotton; other areas poured out a growing stream of cereals. Farmers in the United States read the disappointing results in falling prices. Over 1870-73, corn and wheat averaged $0.463 and $1.174 per bushel and cotton $0.152 per pound; twenty years later they brought but $0.412 and $0.707 a bushel and $0.078 a pound. In 1889 corn fell to ten cents in Kansas, about half the estimated cost of production. Some farmers in need of cash to meet debts tried to increase income by increasing output of crops whose overproduction had already demoralized prices and cut farm receipts.

Railroad construction was an important spur to economic growth. Expansion peaked between 1879 and 1883, when eight thousand miles a year, on average, were built including the Southern Pacific, Northern Pacific and Santa Fe. An even higher peak was reached in the late 1880s, and the roads provided important markets for lumber, coal, iron, steel, and rolling stock.

The post-Civil War generation saw an enormous growth of manufacturing. Industrial output rose by some 296 percent, reaching in 1890 a value of almost $9.4 billion. In that year the nation's 350,000 industrial firms employed nearly 4,750,000 workers. Iron and steel paced the progress of manufacturing. Farm and forest continued to provide raw materials for such established enterprises as cotton textiles, food, and lumber production. Heralding the machine age, however, was the growing importance of extractives -- raw materials for a lengthening list of consumer goods and for producing and fueling locomotives, railroad cars, industrial machinery and equipment, farm implements, and electrical equipment for commerce and industry. The swift expansion and diversification of manufacturing allowed a growing independence from European imports and was reflected in the prominence of new goods among US exports. Already the value of American manufactures was more than half the value of European manufactures and twice that of Britain.

Whitten claims there were two depressions, 1893-1894 and 1895-1897. Of course, these two depressions were probably the same depression, with separate surface appearances, but with a common root system.

There was also a depression in 1901. And there was also a bank panic caused recession/depression in 1907 – the so-called J.P. Morgan bank panic, caused by America’s leading banking family for the benefit of America’s leading banking family. We are seeing, as we have seen in the other Night-Cycle periods, a sustained de-construction of matter lasting for very close to 18 years. There are bull rallies in the stock markets during periods of economic deflation. There are companies that thrive. There are attempts made by the masters of money to turn the tide of the economy in the direction of prosperity. These rallies are bear traps. The bears control the markets, with their negative energy: a combination of dread, sense of righteous self-martyrdom, appreciation of the tragic (the tragic view belongs to the Romantic) – and a real terror of sudden poverty which leads to tight-fisted saving as an ethic, which new Puritanism sinks the world further into inactivity, as the currency dries up in bank accounts, no longer circulating, which cripples the body politic. Banks refuse to lend, since fewer and fewer people become credit worthy. Fewer and fewer people want to borrow, as borrowing is viewed by the suddenly self-sufficient natures as foolish, at best, or part of a criminal intrigue they wish to avoid. Bankers are viewed as satanic accomplices. The capitalist is equated with the slave-owner and the heartless landlord.

Depressions are a moral reaction in the heart of the culture to an aggregate business corruption, greed, and spiraling inflation that makes life become or seem dreadful. In the same way that light is born as a seed at Midnight (Winter), as represented by the Christ-child in the Christian system, so darkness is born as a seed at Noon (Summer)…and this Darkness came be represented simply by the word ‘No’ in terms of the question of ‘Is Life good?’. The Sun-Hero, at birth, assents to this question: ‘Yes, life is good.’ But the light is different at Noon; and the world is jaded, tired, corrupt, used up – entropy sets in.

I have written that the two forces, Light and Darkness, Man and Woman, Positive and Negative energy, meet twice during the annual journey of life, once in the Spring (March 21) and a second time in the Autumn (September 21). If you add the 9 months of gestation to the Spring conjunction of the Masculine and Feminine (battle or conjunction or mutual destruction), you get a birth time for the child of this conjunction of December 21, the birth-time of Jesus Christ. If you add the 9 months of gestation to the Autumn conjunction of the Masculine and Feminine forces, you get a birth time for this second child, the child of Autumn, as June 21, the birth-time of John the Baptist. John the Baptist comes first; prophecies the coming of Jesus; and is killed. Jesus comes after, and redeems the world through his own death.

We will remember that John the Baptist brought ‘water’ to the Earth, the water of baptism, purification, the flood. Where Jesus brought ‘fire’ to the Earth, the fire of the Masculine Principle, the fire of Day-Light.

John the Baptist brings the ‘water’ when the Night-Cycle begins to gain power, at Noon or at the Summer Solstice, June 21.

Jesus Christ bring the ‘fire’ when the Day-Cycle begins to gain power, at Midnight or at the Winter Solstice, December 21.

The 1901-1903 depression was brought on by more greed and corruption on Wall Street. The smoking gun was the struggles between E.H. Harriman, Jacob Schiff and J.P. Morgan (allied with James J. Hill) in their bid for financial control of Northern Pacific Railroad. The cornering of Northern Pacific stocks was organized by James Stillman and William Rockefeller’s First National City Bank – financed with Standard Oil money. A compromise between these financial titans resulted in the formation of the Northern Securities Company – but the damage to Wall Street was already done. On May 17, 1901, the New York Stock Exchange crashed with a terrible suddenness. Harriman, president of Union Pacific Railroad Company, had been purchasing Northern Pacific shares in an attempt to monopolize the Chicago railroad market.

Miriam Medina writes about the panic/depression of 1901-1903:

The break started shortly before 1 o'clock, and when the market closed, some two hours later, quotations had slumped in the interval anywhere from 1 to 20 points. Many fortunes that had been made in the last six months by men who never before had a dollar, and who, encouraged by their great successes in the phenomenal market since Mr. McKinley's election had "pyramided" their accounts, were in some cases wholly wiped out as a result of the crash, and others so considerably reduced that little remains. Even some of the so-called "big" men have been badly hit, and there was talk also of serious trouble on the part of some brokerage houses.

So threatening, indeed, is the situation that conferences of important bankers and banking interests were held late last evening to discuss the matter and to consider ways and means to prevent a far-reaching financial catastrophe.

Hence is was that after the market's close last night there was gloom in many parts of the financial district, where for some months past only smiling faces have been seen. The youths and others, who, elated by their new-found fortunes, have been slapping one another on the back and half playfully, half in earnest, referred to themselves as "financiers," were chewing the "bitter cud" of despair and disaster, and wondering how it all happened. These are the men of whom before election Wall Street had never heard. Of many of them Wall Street will probably never again hear.

When the Break Came

The break itself came as out of a clear sky. All speculative eyes on the Street had in the early dealings been centered upon a further phenomenal rise in Northern Pacific common stock, which, the "corner" in it still operating, had jumped up by leaps and bounds to 180, as compared with Tuesday's close of 143 1/2- a gain of 70 full points in three days had then reacted to 145, only again to advance from that figure a dozen points or more, with $200 bid for it after the close of the market, and $70 a share paid for the use of it over night by the shorts. It was all so spectacular, all so interesting, all so phenomenal, that concerning the rest of the market the Street, generally, gave little serious heed and certainly saw little prospect or probability of the collapse that came so soon afterward.

Here and there some of the more conservative in the Street shook their heads ominously and declared that any such "corner" was always disastrous to the general market. But the rank and file paid no attention to these warnings and went blithely ahead buying stocks and sending them higher.

Of a sudden, Burlington stock, which had been more or less heavy all the morning, began to show unmistakable signs of weakness, while almost coincidently the Erie issues were depressed. The rank and file watched and wondered, and as they watched, the prices of the issues went lower still. Then in the general list, prices also began to fall. First it was St. Paul, then it was Missouri Pacific, and then it was Union Pacific. Finally the whole market was declining. Some holders of stocks not knowing the why and the wherefore of it and thinking it only one of the many ordinary reactions that have from time to time appeared in the market since election, "sat" on their stocks and looked for a recovery. Other holders, more timid if might be more conservative, of even less able to hold proceeded, however, to part with their holdings. Soon the contagion spread, the professional bears on the floor of the Exchange the while aiding in this by hammering the whole list.

Quotations thereupon began to break, not quarter or half points between sales, but one and two points. That settled it. The entire Street proceeded to sell. Where before the cry had been only. "Buy, buy, buy," it became, "Sell, sell, sell." Stocks were literally tumbled out sold without rhyme or without reason-anything "to get out."

The Affected Stocks

And so it was that every prominent stock on the list broke badly with the one conspicuous exception of Northern Pacific, which held its head so well above the storm that at the close of the day it showed a net advance of 16 1/2 points. In contrast, St. Paul sold down from the high figure 20 points, and closed with a net loss of 15 1/2. Union Pacific from its high figure, dropped 17 1/2 points and closed for a net loss of 9 3/4 points. Missouri Pacific broke 14 1/2 points, closing with a net decline of 8 1/2. Amalgamated Copper broke over 12 points; Sugar, 7; Atchison, 8; United States Steel, 7; and the preferred 12; Pullman Palace Car on one sale of 100 shares, 11 1/4, and many other conspicuous stocks from 3 to 5 points.

The break, indeed, was the biggest single-day general break the Street has seen since 1893-greater even, so far as the general list is concerned, than the decline following the death of Roswell P. Flower. When it was in progress the scene on the floor was one of the wildest excitement. The mad struggle to buy and to sell Northern Pacific stock at the opening had been startling enough; that in the late afternoon was unparalleled in recent years. Brokers acted as insane men. Men, rational and responsible, fairly fought with one another in the execution of their orders. Big men lightly threw little men aside, and the little men, fairly crying with indignation, jumped anew into the fray-using hands, arms, elbows, feet-anything to gain their point.

And, all the while, there was such yelling and shouting as had not been heard even on the recent "wildest" days in the street. Stocks were going down points at a time, and a second's delay might mean thousands of dollars.

To the spectators in the distant gallery of the Produce Exchange it was something incomprehensible, almost, demoniac- this struggle, this Babel of voices, these wild-eyed excited brokers, selling and buying, buying and selling. But to the brokers themselves it was serious business indeed. Fortunes were in their hands in trust for their customers who watched, eager-eyed, in the brokerage offices, the pulsating of the tickers as they told what was being done on the floor-as they ticked out how fortunes, easily made, being more easily lost.

Northern Pacific Corner. 

As for the market itself, the rise in Northern Pacific being the opening feature, comes logically first. And such a rise it was, proving beyond all question that the stock was actually cornered. On the day previous it had closed at 143 1/2, this marking a net gain in two days of no fewer than 33 1/2 points, the stock at the same time commanding a premium of 7 per cent over night. Yesterday it opened up at 155, on transactions involving 2,000 shares a gain of 12 1/2 points, and then fairly jumped up to 180. From there it declined to 145, only later to go to 167, and to close at 160, a net gain of 16 1/2 points on dealings in 50,000 shares.

Who these Northern Pacific losers are is only a matter of conjecture, but rumor is busy with many names. John W. Gates is credited with being short no less than 60,000 shares of the stock 50 points below the close of last night, while a number of Western " plungers" are also declared to be rather heavily involved. Mr. Gates smiles when asked about these stories, and declares that he is not short of the stock, and in fact, was never short a share of stock in his life, except some Sugar, which he was glad to cover without profit. In the meantime, however, he has postponed his European trip.

Isidor Wormser, also credited with being short of the stock, was seen by a New York Times reporter yesterday. "They say you are heavily short, Mr. Wormser," ventured the reporter. "Oh, do they? You don't mean to say so!" was the answer. And then, as he turned to go away, "I have nothing to say."

As for the stories of fortunes made, they are many. According to one report, ex-President Cleveland through a "tip" from Mr. Lamont, had rounded out a cool half million of dollars, while other of Mr. Lamont's friends had also done well. If this is so, it does not agree with the report that the Hill people had sold their stock, for Mr. Lamont is very close to Mr. Hill. However, all this is more or less gossip and cannot be verified. One certain gainer is known. He is John Manning, a well-known broker on the floor, who sold the 2,000 shares of stock yesterday at 180-sold it short, at that-and in less than a minute had bought it back at 160, a clear gain of $20,000.

The amount of money lost by the short side in the stock is variously estimated at from $40,000,000 to $75,000,000. As for actual figures, these will not be obtainable for some time, if ever. Mr. Keene is credited with having enriched himself to the extent of $3,000,000 by the corner. To what extent the syndicate have profited nobody ventures an opinion. Some idea of the added worth of the shares may be gained when it is pointed out that they have enhanced just $50 per share since last Saturday. At a conservative estimate 600,000 shares have been traded in the first three days of this week, so that with an increase of $50 per share the long side of the market finished business yesterday about $30,000,000 richer than on Saturday.

Great Fight For Control

 As for the talk telling of a great fight for control of the stock between the Morgan-Hill interests on the one side and the Harriman-Kuhn-Loeb-Standard Oil people on the other, nothing definite can be learned. In some parts of the Street the talk of a fight and of a great clash between these powerful interests is credited. In other parts it is ridiculed. One story has it that over 100,000 shares more than the actual capital stock of the company have been bought by the opposing syndicates, and that it is as yet uncertain where control lies.

In this connection a Wall Street news bulletin yesterday published the following as "on authority." " The Northern Pacific situation is this: The Morgan Hill interest some time ago sold a considerable amount of stock. The Harriman syndicate gradually acquired a very large amount of stock, nearly, if not quite, control. Notice was given that this stock had been bought not for war, but to promote harmony. The Morgan-Hill interests did not accept the proposition, but immediately began to buy and have bought in the last few days a very large amount of stock.

"The two interests, Hill-Morgan on one side and Harriman syndicate on the other, have bought more than 100,000 shares more Northern Pacific than there is in existence. It is impossible to tell with certainty which interest has control until it is known which party gets most certificates, and which gets most of settlement of contracts. Obviously one has voting power and one has not.

"Pending developments, stock is being loaned to legitimate borrowers and assurances are given that the books will not be closed immediately, giving time for arbitrage dealers to adjust their balances. Large arbitrage settlements have been made in London, which will materially reduce the borrowing demand from that source."

This, however, is altogether in conflict with the statement of Robert Bacon, a partner of J. Pierpont Morgan, who to a reporter of The New York Times said yesterday: "The Hill-Morgan interests in Northern Pacific are intact." Mr. Hill himself, seen coming out of J. P. Morgan & Co's office at half past 1 o'clock yesterday, and asked about Northern Pacific, replied: " I have not bought a share of Northern Pacific in six months.

Asked as to the reported differences between the Harriman syndicate and the Morgan-Hill interests, he said: "That has been magnified a thousand times." On the same subject a partner in the firm of Kuhn, Loeb & Co. said: "It would not be wise to make any statement today because not tending to promote the securing of that harmony which we all desire." Asked whether this meant that there actually was a fight on the gentleman in question merely laughed. James R. Keene, who is credited with having engineered the "corner," is the Street declares, "sawing wood and saying nothing."

 Appeal To Mr. Morgan

 However, whatever the situation, several conferences were held yesterday and late last night, attended by Mr. Hill, Mr. Harriman, James Stillman, Vice President Lamont of Northern Pacific, and several other gentlemen. What transpired was not disclosed. It is said that Mr. Morgan, now abroad, has been appealed to settle all matters in dispute, and that a reply from him in answer to a cablegram sent last night is expected at any time.

As to what will happen to the stock today that is only a matter for conjecture. Brokers sum the situation up thus: "Either the shorts will fail on it, or they will be given the stock by those who have cornered it."

Coming now to the general market, which broke so badly in the face of this great rise in Northern Pacific, it may be said that in large measure this very "corner" was responsible for the break. It showed, first, that in some respects, at least, certain of the advances in prices had been brought about artificially and without regard to real values. But, above and beyond this, particularly when the stories of a conflict between leading financial interests became so persistent, it led to many reports that certain, far-reaching consolidation schemes planned and planning would never be carried through. Specifically it may be said that it was declared with some positive ness that the Burlington deal was among those that would never be completed, principally because of the Northern Pacific development.

From Burlington the story of "clashes" spread to other railways-to St. Paul, to Missouri Pacific and so on all through the list. Then, again, it was declared that some of the larger financiers were "selling out" on one another. And so the disturbing rumors went on, while the uneasiness was added to by a sharp rise in call money rates, at one time to 20 per cent. Where it closed, and by the announcement of an engagement of gold for export. London also was reported to have received the "cue" to sell, and this in a measure was borne out by the much lower prices sent over by London at the opening here, all the international stocks being down anywhere from one to ten points, the big drop being, strangely enough, in Northern Pacific.

But, as already pointed out, in the early trading Wall Street operators gave little heed to any of these disturbing reports or to the lower figures. Instead they went gaily in and bid the general market up from one to five points, Union Pacific leading always excepting Northern Pacific. Burlington, however, lagged, but not Erie, the latter being understood to be in the Burlington deal. Soon Burlington developed actual weakness: but still the market held. Then Erie began to fall off, and then the rout of the bulls began. They ran slowly at first, but as the decline grew greater they ran faster, and thus accelerated their own downfall. In the end they were in full flight and throwing over their stocks, though the nature of the purchases suggested that some of the stronger people were buying at the sacrifice figures.

Fluctuations In Prices

Prices broke and rose frequently a point and two points at a time. An extreme case was where one sale of Brooklyn Rapid Transit was made at 73 and the next at 77-a clear gain of 4 full points. So great, indeed, was the rush to sell that in the last hour the total transactions for a single hour probably established a new record. It is a fact that the tape did not "tick off" the last transaction until 3:16 o'clock, being a full sixteen minutes behind. Not only that, but then came the Government bond sales, which usually are printed at 2:15 o'clock, but which yesterday were absolutely ignored until after the market's close. The last transaction in them was not recorded until 3:25 o'clock.

What Brokers Say

What some representative Stock Exchange brokers think of the market will appear from these expressions of opinion. S. V. White- What do I think? Why, what is there to think? The Northern Pacific "corner" has killed the market, has sickened it unto death.

Bayard Dominick of Dominick & Dominick-. This market was the result of over-speculation. Men, women, and children have had more on their hands than they could take care of, and the sequence was natural. It was not unexpected by brokers with any experience in Wall Street. The market has had a splendid decline, and the atmosphere has been greatly cleared. A revival will come after the belated liquidation is over.

H. H. Hollister of Hollister & Babcock- "The Street feels that there is a battle of giants for the Northern Pacific, and that if either side got it the Burlington deal would be jeopardized. That is the reason for the nervousness. At the same time today there was a kind of bargain counter here for people who had the money to avail themselves of a good opportunity. …

At that time all precedents of every kind in Stock Exchange history were broken. Where a few years before, transactions of 200,000 shares a day had been regarded as constituting a large market and half a million shares as a day of extreme activity, scarcely a day now elapsed in which the volume of business did not run from one to two million shares, culminating on April 30, 1901, in transactions of 3,200,000 shares. Prices in the meantime were advancing at a rate which brought the entire financial public into the field as a speculator. 

The real force underlying the movement was the purchase of stock companies by other companies which pledged their credit to raise the funds requisite to provide for the purchase. This movement culminated in the famous Northern Pacific corner of May 9, 1901, when the efforts of two rival groups of capitalists to get hold of that railroad property forced its shares to the price of $1000, the stock having never touched $100 until three weeks before. Apprehension that operators who were unable to deliver stock which they had pledged would be dealt with summarily, caused one of the most violent collapses of values in the Stock Exchange's History.

Recovery was prompt, and both 1901 and 1902 were characterized by numerous sensational movements for the advance, the second of those years scoring as a rule the higher values. In general, however, it was recognized that high-water mark in Stock Exchange activity had been reached. In the autumn of 1901 and in the fall of 1902 and the early part of 1903 severe reaction in values supervened.

The noteworthy characteristic of the period was the employment of enormously wealthy syndicates to sustain prices for the newly issued shares on the Stock Exchange until the public could be induced to buy. Such syndicates were remunerated at first by large allotments of stock and later by heavy cash payments, the syndicate formed in March, 1901, to "underwrite" the billion-dollar stock issued by the United States Steel Corporation to take up the shares of other steel and iron combinations, pledging itself, in case of necessity, to advance $200,000,000 capital for the purpose.

The stock issue worked out so successfully, however, that only a small fraction of the guarantee was called for, and two years later the original capital subscribed was returned to subscribers, with an additional cash allotment sufficient to raise profits to 200 per cent. A second syndicate, formed in 1902 to underwrite a $50,000,000 bond issue by the same corporation and the conversion of $200,000,000 of its stocks into bonds, fared less fortunately, being obliged to perform the whole of its guarantee at a time of falling prices. In the spring of 1903 it was generally recognized that the extensive employment of the syndicate underwriting plan had "tied up" immense amounts of capital which were usually available in the general market. The investing public having bought very sparingly and the syndicate banking interests being unable to support prices, a very severe and general decline on the Stock Exchange ensued.

This long, colorful description of the Crash of 1901 and the subsequent depression, serves to reiterate the lessons one must learn about the nature of popped economic (ego) bubbles. In many cases, the destruction of the economy is triggered by a few men who have been best served by the lax economic regulations limiting their crimes and shenanigans, allowing them to line their own pockets at the expression puts it. But how much money is enough? Is a billion enough? Is ten billion enough? J.P.Morgan was one of the richest men in the world. But he apparently wasn’t rich enough. The mode of thinking/reacting of the type-A personalities which characterizes most successful entrepreneurs/businessmen and businesswomen is that the world is a jungle, that life is a war for survival, that the weak die and the strong survive – economic darwinism. This is a form of schizophrenia, or course – because this type believes in the half-truth they are perceiving – that the world has no heart and no soul and no decency, and that only the fool and loser believes it does. This form of schizophrenia may make for explosive business successes; but it does not make for a sane society. These schizophrenics are not good role models for our children – look at their own lives, which are often scarred with crimes, divorces, injured children, twisted values, loneliness, and self-destructive behavior.

Relatively, a very few VERY rich men pulled the Global Economy down to its knees in a matter of months. Why? Because they could not control themselves. The spirit of Greed and the quest for Power was such that they could not help themselves. Like Ahab, they had to kill the White Whale, they had to chase the White Whale, life on land was not enough for them, they had to make that final deal, the one that turned billions into trillions. And now the average American citizen will be paying for their failure, their insanity, for at least a generation – until the Spirit of Greed takes over the world again and we race off a cliff, believing that money is the only thing worth chasing in this world.

The same story happens over and over again.

If I have been able to discover 18-year half cycles (36 year cycles) that define the day-night cycles of the economy, does the reader think that professional, nightly educated economists are not aware of this? I find it almost unbelievable that Allen Greenspan and Ben Bernanke are not aware of these cycles. My view is that Mister Greenspan probably did know that economic cycles in America did run in 36-year cycles, top to top, and that 2001 was the end of the American expansion, in terms of Nature’s (or God’s) plan – but that Mister Greenspan, like Ahab, believed he could cheat the devil, trick God, overpower Nature with his advanced intellect. He would break the cycle. He had been studying the problem his whole life; and he had a solution to this encroaching power of the negative. He would flood the world with money. He would make everything float if he flooded the world with cheap money. If the Federal Reserve Board had just flooded the world with cheap money in 1929, darkness would have been banished from the world. We now knew how to strip the world (and history) of all its negativity. And he was just the man to do it.

Call it arrogance, hubris, pride, genuine faith, optimism…if Mister Greenspan had been acting in accord with Nature, he would have seen the Dot Com bubble bursting in 2001 as the first step toward a necessary deflationary season – and he would have begun to raise rates and protect the dollar. Yes, this would have caused recession. People would have lost jobs. Companies would have failed.

To have done this would have required an amazing political will – one that usually is missing from democratic systems, where ‘being liked’ means being elected, where being a kind of Santa Claus, spreading gifts and good news all around, is the road to political power.

Because Greenspan (and the Federal Reserve Board) fought Nature will all its might – and is still doing so, claiming that making it easy for people and companies to borrow will save the nation’s economy – still not understanding that we are heading over a cliff because we abandoned all borrowing discipline as a nation (high to low, wall street to main street) for the better part of two decades. Borrowing is what created this mess. Being a debtor nation, a debtor society, slaves of the banks, is what led to our demise. Living on borrowed time. Borrowing more – whether the U.S. government or the U.S. consumer – is the absolutely wrong approach. We need deflation; we need a painful readjustment; we need a new set of values that looks at easy money with suspicion, that looks at corrupt business practices as immoral and self-destructive.

I am not ignoring the decent side of Alan Greenspan, his desire for light, for wealth for all the world’s citizens, for an ever-expanding economic well-being. There is that side, I’m sure. But Mister Greenspan is also part of the 1% of the American rich who control everything in this country and many things in the world. This is the American Ruling Class. These are the people the U.S. government is now bailing out with gifts of trillions of dollars. The Ruling Class insists of having the freedom to succeed; but they apparently don’t insist on having the freedom to fail. They insist of being allowed to keep the fruits of their labors; but they beg (literally BEG) for the government to save them when they fall flat on their collective face. When this American Ruling Class consciously chooses risk over reason, when they intentionally walk down the path of self-destruction, with a complicit understand from the power sources in Washington, that they are too big to fail, that Washington will not allow them to fail because it will be too devastating to the country if they were to fail, then what is their incentive to obey the law, to protect America’s money and financial structure, to act like sane guardians of America’s future?

All these companies that broke the law to gain the illusory, forbidden Golden Apple, that failed to protect their investors with sound monetary practice, if they truly are too important to America for to be allowed to fail, should be nationalized by the government – and when profit returns to these institutions, if it ever does, these profits should thereafter fund national health, education, and public service projects (police, fire, natural disaster relief) that will benefit all qualified Americans.

America does not lose its covenant with God as the New Jerusalem if it puts the welfare of all of its citizens above the ‘freedom’ for a few citizens to become billionaires by stealing and cheating. Criminals always get rich, or die trying to get rich. The welfare of all Americans comes before any legal or moral obligation to provide avenues for a handful of billionaires to thrive on their own ability to bend the law, to overwhelm competitors, or to bribe government officials to grease their road to riches.

The (negative) Night-Cycle – the Dionysian Cycle – is defined by anger at the Father, anger of the Son at the Father for the Father’s imperfection (and corruption); anger of the Daughter at the Father for his perceived lack of love (feminist movements as anger at the Patriarchy). During the Day-Cycle, the Dark Son is at odds with the Father; but the Light-Son defends the Father, becoming the Father for a time. When the Light-Son falls, he joins the Dark Son in insisting on a revolt against the heavens. But the Light-Son eventually finds Jesus in the Darkness, Jesus being a path that transcends political revolution and leads back to light, back to an atonement with the Father – and Light returns to the world in this re-born alliance between Father and Son.

Where are we now? The Light-Son has fallen in to the Darkness and his alliance now is with De-Construction, with pessimism, with tragedy and against the mansions of the Father.

The Anti-Hero views the Establishment, the Power Center, as the force of Evil. He does not defend the Law which he now finds as being a corruption designed to preserve the power of the corrupt Ruling Class.

The Hero defends the law to defeat the criminal class that threatens civilization. The Hero is the Guardian Angel of Civilization. When the Hero falls, there is no powerful moral force left behind to defend civilization. War comes to the world. Civilization is admonished. The sanctuary is lost.

The Hero phase resembles the Lone Ranger (with his amiable shadow companion Tonto) defending the town and civilization from the criminal barbarians.

The Anti-Hero phase resembles John Lennon defending Eldridge Cleaver (his giant menacing shadow) and his right to lead a revolution against the White Man’s injustice; or John Brown’s raid at Harper’s Ferry. (We remember that the ‘scourge’ of Marxism/Communism in Asia was the brain-child of disaffected, romantic, rebellious white youth punishing their rich fathers by pulling their materialistic empire down to the ground. Lenin, Marx, Trotsky were all children of affluence siding with ‘the enemy’ – the poor, the dark skinned, the rejected -- in order to punish their fathers.)

The Panic of 1907 was also known as ‘the Bankers’ Panic’. The Panic of 2007 also was a kind of ‘Bankers’ Panic’. In fact, almost all financial panics are ‘Bankers’ Panics’. The bankers kill the goose that lays the golden egg. Isn’t that the lesson that we are learning in this study? The bankers kill the goose; and the government bails out the bankers, because the society cannot survive (and thrive) without the bankers, without capital.

During 1907, the New York Stock Exchange lost 50% of its value, this as the nation struggled with recession, and banks and trust companies failed, one by one, after bank-runs (deposit withdrawals) by fearful citizens. The Panic of 1907 started in New York City, but soon spread across the country, as local banks failed and businesses sank in to bankruptcy. Various causes of the panic have been suggested by historians: a credit crunch; a depositor’s loss of confidence in the banking system; the lack of a central bank to inject capital into the financial markets.

The economy turned nasty in the summer of 1907. U.S. Steel, the largest industrial corporation in America, reported a sharp drop in earnings and orders; railroad earnings followed suit. The Charles W. Morse’s Shipping Corporation then collapsed, sending a sign to America that more hard times were approaching. In the Autumn, New York City had trouble selling its municipal bonds on Wall Streets. There were no buyers. In October, the Heinze-Morse chain of banks failed. And runs on Knickerbocker Trust Company, the Trust Company of America, the Lincoln Trust Company and more than ten other financial institutions forced them out of business. By late October, panic was widespread.

Trust companies were required to maintain cash reserves of only 2-3% -- and could afford to pay higher rates of return than ordinary banks because of this. However, when runs on trust companies happened, with so little reserves on hand, these companies were hard-pressed to cover depositors’ demands.

The Panic of 1907 occurred (reminiscent of the Panic of 1901) after the October 1907 failure of Otto Heinze, whose family owned a major stake in United Copper Company, to corner the market on the stock of the company. This Heinze Family failure drove Otto’s brokerage house, Gross & Kleeberg, into bankruptcy. Soon thereafter, the State Savings Bank of Butte, Montana (owner by Otto’s brother F. Augustus Heinze) was insolvent. Soon, all the banks that had funded the scheme suffered depositor demands for withdrawals, as fear of another contagion of widespread bank failures grew.

Within a week, the Knickerbocker Trust Company (New York’s third largest trust) collapsed. Soon, all of the banks in New York City were under attack. Soon after, panic spread throughout the nation as rumors of bank vulnerability traumatized bank depositors.

J.P. Morgan used much of his own money, and convinced many other New York bankers to follow his lead, to shore up the banking system. This helped to stem the tide of decline.

In November of that same year, a large brokerage firm borrowed heavily using stock of Tennessee Coal, Iron and Railroad Company as collateral. Collapse of TCI stock price was averted only when President Theodore Roosevelt approved an emergency takeover of the company by U.S. Steel, much to the delight of the executives of U.S. Steel.

These incidents eventually led to the creation of the Federal Reserve System as a centralized authority to address monetary imbalances in the markets. And it was the Federal Reserve System, headed by Alan Greenspan, that triggered the Great Depression of 2007 through incautious inflation of the monetary supply.

We will look at the cycles of the Twentieth Century with much less pleased astonishment than we looked at the Nineteenth Century.

The Twentieth Century’s economic cycles are pretty generally recognized. When the depressions start, and when they end – exact years -- is not always agreed upon. The Night-Cycle 1965-1983 is almost never called a depression by the experts, although the agreed upon phrase, ‘stagflation’, a paradoxical phenomenon in which recession and inflation live side by side, sucking life out of the economy with both high unemployment (low growth) and a high inflation rate (a declining value of local currenty), is pretty widely acknowledged.

There is no question that the 1965-1983 period was a ‘spiritual depression’. Rebellion against the white establishment, Son against Father, civil-rights rebellions, sex-drug-rock and roll culture (Dionysian or Bacchic ritual ‘rediscover of Nature’), an intellectual condemnation of Western Civilization and a romantic embracing of Eastern religion (the Rajneesh commune springing up in the desert outside of Antelope, Oregon is symbolically significant).

Communism is attractive to Dionysus: shared property, shared love, an end to possession (‘imagine there’s no possessions, I wonder if you can, no need for greed or hunger, a brotherhood of man’). This is a horizontal world-view, a world-view of equals.

Ideals of growth and progress are no longer believed – an Eternal Now, unchanging, undifferentiated, a state of Being seems the new Ideal. There is no growth or progress in the Night, in the Winter. Growth and progress are a result of the Sun.

The 1971 anthem of the New World Order – the world of the dreamer, the sleeper, the idealist, the Son rejecting his Father’s world – was an attack on the Orthodox religious structure, materialism, and nationalism, the three-pronged ideology which had raised America to the status of Super Power after World War II. The shadow side of ‘victory’ was now being exposed to a generation on the downhill slope, a shadow which displayed greed, arrogance, racism, brutal suppression, and self-

Imagine there's no heaven

It's easy if you try

No hell below us

Above us only sky

Imagine all the people

Living for today...

Imagine there's no countries

It isn't hard to do

Nothing to kill or die for

And no religion too

Imagine all the people

Living life in peace...

You may say I'm a dreamer

But I'm not the only one

I hope someday you'll join us

And the world will be as one

Imagine no possessions

I wonder if you can

No need for greed or hunger

A brotherhood of man

Imagine all the people

Sharing all the world...

You may say I'm a dreamer

But I'm not the only one

I hope someday you'll join us

And the world will live as one

Of course, John Lennon is a manifestation of the Romantic Autumn child. As is Bob Dylan, and the whole ‘rebel with many causes’ materialization of a new ideal of justice that defined a generation of ‘dreamers’ founded in the horizontal (female) principles of human equality.

Noon 1965 – Male Ego Deflation begins. Female Ego Inflation

begins.

1965 – Bob Dylan album ‘Bringing It All Back Home’ released.

1971 – John Lennon’s ‘Imagine’ released.

1972 – ‘I Am Woman (Hear Me Roar)’ released by Helen

Reddy.

Dusk 1974

1974 – Elton John’s ‘Goodbye Yellow Brick Road’ released.

1979 – AC/CD ‘Highway to Hell’ album released.

Midnight 1983 – Ego Inflation begins.

1983 – Men-At-Work’s ‘Land Down Under’ released.

Duran-Duran’s ‘Hungry Like a Wolf’ released.

Hall and Oates’ ‘Man-Eater’ released.

Toto’s ‘Africa’ released.

Marvin Gaye’s ‘Sexual Healing’ released.

Thomas Dolby’s ‘She Blinded Me With Science’

released.

Lionel Ritchie’s ‘All Night Long’ released.

Duran-Duran’s ‘Union of the Snake’ released.

Every physical manifestation, every event, every historic figure, every popular song is also a symbol describing an arc of time on Time’s 360° wheel. But one must understand the symbolic language in order to place the phenomenon. The Day-Cycle spends much energy suppressing and belittling the symbolic language as not being ‘reality’. The Day-Cycle views art, poetry, mysticism, psychology as so much ‘female’ hocus-pocus – Time is money afterall – only a fool waste’s time pursuing dreams and languages that don’t put money in his pocket.

Noon 1965 – Ego Deflation begins.

Dusk 1974

Midnight 1983 – Ego Inflation begins.

Dawn 1992

Noon 2001- Ego Deflation should have begun.

Dusk 2010

Midnight 2019 – Ego Inflation begins.

Returning to our present: our most recent ‘growth era’ has also ended. The false over-inflation stimulus designed by Alan Greenspan to keep the man on top indefinitely has crashed. No more ‘cash influsion’ of Viagra will turn the mole-hill into a mountain again. The Man of Money is spent. The Era of Greed has been (literally) stood on its head.

Viagra is a very significant symbol of this era. Old men who have passed their (re)productive peaks are desperate to have a technological fix to their problem – a waning vigor – or, more explicitly, a running out of time. In fact, Nature is the problem; old age is the problem. Death is the problem, which can be fixed by science.

But the desire to be a teenager for ever is a spiritual problem. Fear of the adulthood, fear of the grave, fear of age and wisdom, fear of losing one’s physical power – that is a profound spiritual problem, one that leads to all kinds of perversions, aggressions, and sins against Nature.

The Viagra Age which is another aspect of the Age of Greed (‘I want my pleasure! And I always get what I want!’) has ended (at least for this round, at least for this moment.) The Ego always returns, in one form or other. Resurrection comes (rose erection); and the rainbow signals this re-birth.

Real fertility is once again possible.

If only one positive comes from the present deflation we have entered let it be the end of the world’s obsession with ‘plastic surgery’, with fake breasts, pumped lips, padded butts, and false erections. Few things are more obscene that a world filled with rich plastic surgeons and children starving to death in Africa, South America and Asia. The culture’s moral values are clearly askew. Appearances matter too much. The compulsion to belong, to live in magazines, to follow trends, to give credence to images over substance, is a sign of being ‘lost in a web of illusions’. The desire to be eighteen-years-old for ever is a symptom of a culture resisting deeper development, a culture living on the surface, a culture frightened of the deep. And the deep is frightening. The deep is full of personal and archetypal monsters. These monsters must be faced and defeated or calmed. Substance and shadow must become integrated in the underworld in order for fears to be mitigated.

Financial analysts and other intellectuals have been studying cycles for many years now, from Sir William Herschel who around 1800 found a connection between sunspots and wheat prices, Clement Juglar, William Stanley Jevons, the Rothschild family, W.D. Gann, Joseph Kitchin, Alexander Chizhhevsky, Roymond Wheeler, R.N. Elliott, Joseph Schumpeter, Simon Kuznets, Edward R. Dewey, and J.M. Hurst (computer cycle research.)

One of the most famous cycle adherents was Nikolai Kondratieff, a Soviet economist who was imprisoned in one of Stalin’s gulags when his theories were considered politically incorrect. He was later murdered on Stalin’s order. Kondratieff’s theories were later developed by American economist Joseph Schumpeter (‘Kondratieff waves’) and French economist Francois Simiand. Simiand named Kondratieff’s ‘Ascendant Phase’ (our Day-Cycle, or Ego-Inflation) ‘Phase A’ and Kondratieff’s ‘Descending Phase’ (our Night-Cycle, or Ego-Deflation) ‘Phase B’. Other economists later expanded Kondratieff’s Day-Night cycle into a four-season cycle: Spring (Improvement – Plateau); Summer (acceleration –prosperity); Autumn (recession – plateau); Winter (acceleration –depression). Kondratieff argued for a 50-54 year cycle in economic processes.

Fred Harrison, in his book, Boom Bust – Housing Prices, Banking, and the Depression of 2010 – argues that the land market follows an 18 year cycle, with a short recession at the mid-point of each cycle, and a longer recession at the ending point. His prediction is that the world will experience a major depression in 2010.

Michael Alexander writes in his Generations and Business Cycles – Part I:

Prior to industrialization the Kondratiev cycle reflected biological generations. It's economic effect was at least partially induced by the generational war cycle, with its impact on government finances. Shorter economic cycles did not reflect the longer K-cycle, but rather operated on their own schedule, possibly also generational in nature. Hence financial panics followed a real estate cycle of about 18 years, denoted as the Kuznets cycle.

In 2002, Gareth Morgan, in ‘This Great Global Bear Market Historical Context’, wrote:

Post Word War II the market can be considered as having three eras.

(a) The 18 years from 1946 to 1964 were the era of the Great Upside Correction from the depression-battered market of the 1930s.

(b) The next 18, 1964-82, covered the period of the Inflation-Battered Market, total annual returns on the S&P were a little more than 7% during this period, slightly better than the galloping inflation rate.

(c) There followed the 17 years, from 1982 to 1999, of the Grand Upside Inflation Over-Correction, which has led to the bear years of 2000-02.

Although we disagree by a year or two, here and there, our view is definitely compatible. Morgan charts the stock market inflation flash points (based on Price/Earnings ratios, that indicate how much inflation there is in stocks) that are almost identical with my ‘top’ readings:

Noon 1893

Noon 1929

Noon 1965

Noon 2001

One clear gauge of economic ‘inflation’, one that is often dismissed or forgotten by economists, is inflation of stock prices. Overpriced stocks are an indication of an overheated (overbubbled) economy. Of course, no one says: ‘Look, stocks have gone up too far too fast. Let’s raise interest rates to drive the prices down and make people poorer.’ However, overpriced stocks are a symptom of an overdone feeding frenzy or bubble-production that will ultimately end badly.

Morgan goes on to write:

Maybe the new century has ushered in another era of modest returns. Signs abound that the current stock-market downturn is no typical slump. For starters, stock prices remain mired at levels around 50% below their highs of more than two years ago.

More ominous, perhaps, is the fact that the stock-market funk has seemed impervious to all the usual remedies. The Federal Reserve has administered repeated adrenaline jolts of monetary easing since January of 2001 and yet the S&P today is more than 35% lower than it was when the Fed began lowering interest rates. Typically, stocks rebound once the economy begins to recover. Yet prices are down more than 25% from this January, when most economists felt the recession of 2001 ended. And recently the stock market has drifted ever lower, back to the panic lows it set in September 2001, just 10 days after the terrorist attacks

Nor does history offer any comfort to today's stock investors. The last three stock-market manias that ended in 1901, 1929 and 1966-68 were followed by 15 to 20 years of horrible average annual returns, ranging between 2% and 5% -- or zero to a negative 1.8% after adjusting for inflation. And no prior market mania saw anything resembling the magnitude and excesses of the most recent stock-market bubble. Nine years of uninterrupted gains with the S&P 500 rising six-fold from trough to peak is testimony to phenomenon of freak show proportions.

‘No prior market mania saw anything resembling the magnitude and excesses of the most recent stock-market bubble’ – and he writes this prior to the housing mania that followed on the heels of this unparalleled stock market mania.

Morgan continued:

Yet most investors, according to recent polling, expect annual stock-market returns ultimately to resume their recent 15%-20% pace. History, regulatory backlash, misunderstood market fundamentals and the continuing stock-market overvaluation all argue that such investor expectations will be brutally dashed. Post-Enron the number of large corporates getting ensnared continues to grow. Even stalwarts like General Electric whose share price is now almost 60% down are coming more closely under the microscope for "over-managing" its earnings through the nineties.

The "Morning-After" effects - Investors, so accustomed to 15%-20% annual gains before 2000 should consider the S&P's performance during the long hangover periods following the previous bubble peaks 1901, 1929 and 1966. Average annual returns slipped to 4.3% from August 1901 to August 1920, 2.27% from September 1929 to September 1949 and 5.09% from January 1966 to August 1982. Real annual returns, removing the effect of inflation during World War I, World War II and the 'Seventies, sank to paltry levels of 0.10%, 0.63% and minus 1.79% during the respective three periods. In other words, investors faced 15 to 20 years of torture after each fall.

Morgan concluded:

We're witnessing the unwinding of an era. The 'Eighties and 'Nineties bore unmistakable similarities to previous eras of rampant plutocracy and excess such as the first Gilded Age, which included the closing three decades of the 19th century, and the fabled Roaring 'Twenties. In all three periods wealth became increasingly concentrated at the highest reaches of the income scale even if some of it trickled down to working stiffs in the form of some rise in real wages. In just the past several decades, for example, average CEO compensation has soared from just 40 times the wages of median workers to over 400 times. In New Zealand this has been championed by the Far Right as 'correcting' decades of suppressed wage disparities. Such claims look pretty trashy in light of the failure of these corporate luminaries to deliver shareholder value.

The price/earnings ratio of the S&P 500 has slipped back to 19. But if past bubble peaks offer any guide, multiples still have years, and many points, of further decline. The issue is whether this correction will be via further stock price falls or whether it will come as earnings rise.

Other similarities exist. The wanton creation of new trading instruments (today's equivalents being the stock and trade of so-called hedge funds); the conviction that economic cycles can be controlled; celebration of new business models; deification of revolutionary technologies; belief in the lusty pursuit of self-interest; exaltation and the showy display of wealth, and, of course, rampant self-dealing and corruption.

Such periods invariably give rise to anti-business sentiment and spasms of severe regulation. The excesses of the first Gilded Age, for example, provoked the Progressive Era and trust-busting of Presidents Teddy Roosevelt and Woodrow Wilson. The resulting environment of stiffer regulation, legal attacks and higher taxes, however necessary, is rarely salubrious for either big business or financial markets.

It is not far-fetched that such a sea change develops again. Enron and its aftermath has created an atmosphere reminiscent of the 'Thirties, when a great deal of securities regulation was passed and the Securities Exchange Commission was created in the US. Even the Bush administration, though dominated by a pro-business ethos, now understands in the wake of 9/11 that there are many things like security that government can do better than the private sector.

No institution but the stock market registers with such precision the seismic swings in emotion between pie-eyed optimism and abject disillusion or insensate greed and grinding fear. By this measure, the post-1982 bull market dwarfed all of its predecessors by a wide margin. The Dow and S&P both rose more than eleven-fold between 1982 and 2000 -- nearly three times the magnitude of their rise during the 'Twenties. The five years in a row from 1995 to 1999 that the S&P jumped 20% or more each year was unprecedented.

It can certainly be argued that some of this move was justified by improving economic fundamentals such as declining inflation and strong corporate earnings growth, at least during the 'Nineties. But not all of it.

    Surely some revelation is at hand;

Surely the Second Coming is at hand.

The Second Coming!

Hardly are those words out

When a vast image out of Spiritus Mundi

Troubles my sight: a waste of desert sand;

A shape with lion body and the head of a man,

A gaze blank and pitiless as the sun,

Is moving its slow thighs, while all about it

Wind shadows of the indignant desert birds.

The darkness drops again but now I know

That twenty centuries of stony sleep

Were vexed to nightmare by a rocking cradle,

And what rough beast, its hour come round at last,

Slouches towards Bethlehem to be born?

W.B. Yeats – ‘The Second Coming’

Much of the book is devoted to reviewing and evaluating evidence about the impact of monetary forces, fiscal policy, and bank lending on economic activity during the recovery. A separate chapter examines the depression of 1937-38, which occurred before the economy had fully recovered from the contraction of 1929-33. As with the recovery that began in mid-1933, Steindl concludes that monetary forces were paramount in the contraction of 1937-38 and subsequent recovery. He finds that neither fiscal policy nor an exogenous component of bank lending contributed to the recovery. Whereas his analysis of monetary and fiscal policy is largely a review of previous work, Steindl presents new empirical tests of the credit channel.

In his review of the role of monetary forces in the recovery, Steindl identifies an apparent puzzle in the behavior of output, money, and the price level during the recovery from the depression of 1937-38. From May 1938 to August 1940, both the money stock and real output grew rapidly while the price level fell. Steindl argues that the occurrence of deflation alongside vigorous growth of output and money cannot be explained by the behavior of aggregate demand, nor by any identifiable series of shocks to aggregate supply. He finds it puzzling that no prior studies examined this period.

Frank G. Steindl, Understanding Economic Recovery in the 1930s: Endogenous Propagation in the Great Depression. Ann Arbor, MI: University of Michigan Press, 2003. xi + 228 pp. $52.50 (hardcover), ISBN: 0-472-11348-8.

Reviewed for EH.Net by David C. Wheelock, Federal Reserve Bank of St. Louis.

The Night-Cycle of 1929 - 1947 is the prototypical Great Depression. But this was not one long depression, without attempts at expansion. There were stock market rallies during the Great Depression. In fact the stock market bottomed in 1933, even though the economy did not really recover fully until (according to our thesis) 1947.

Frank G. Steindhl, in his book Understanding Economic Recovery in the 1930s: Endogenous Propagation in the Great Depression writes that there were a series of depressions, not one depression. After a partial recovery in 1934-37, Steindhl writes there was another depression from 1937-38, and a deflation from 1938-1940. American involvement in World War II ran from 1941-1945, during which time massive deficit spending directed nearly all industrial production to the war effort. But was there a depression through 1947.

In their article 'The Great Depression of 1946', Richard K. Veddar and Lowell Gallaway argue that there was. Quoting from this article:

It seems inevitable that some Ph.D. student in economics wome time soon will pick up a recent copy of the Economic Report of the President looking for a dissertation topic and learn that there was a Great Depression in 1946, a topic which he or she will then analyze using all the tools of modern economic analysis. The student will read that real groww national product in 1946 fell 19%, the largest single decrease in annual output in the century of recorded annual GNP data. He or she will also learn quickly that from 1944 to 1947, real output fell by 22.7%. Looking up population figures, the stuent will observe that per capita output actually declined by more than one-fourth in real terms over the three years of conversion from war to peace, and did not regain the pre-depression (1944) level again until 1964.

From all this the student will no doubt conclude that the heretofore neglected Great Depression of 1946 was the worst cyclical downturn in modern American economic history, and that, by some measures, it had a greater disruptive impace of the American economy than the earlier, more celebrated Great Depression of 1929 - 1941. For example, in the earlier downturn, real per capita BNP surpassed the 1929 peak levels with 12 years, compared with 20 years it took to surpass the 1944 peak after the 1946 depression. Moreover, while the 1929-33 downturn wa quantitatively a bit larger (30% vs 23%), no single year exhibited a decline of the magnitude of that witnessed in 1946.

The Great Depression of 1982

Steve Verdon | Monday, January 19, 2009

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Alex Tabarrok has a post on the Intrade markets depression contract which indicates that it really isn’t a contract for a depression. Here is the key clause from the contract,

For expiry purposes a depression is defined as a cumulative decline in GDP of more than 10.0% over four consecutive quarters. This is calculated by adding together the published (annualized) GDP figures (as detailed below). If these annualised figures add up to more than -10.0% over four consecutive quarters then the contract will expire at 100.

Alex points to this explanation from Donald Luskin of why this doesn’t quite signal a depression,

The problem is that if you add four quarterly change-figures that are already each annualized, you will get a far larger cumulative result than the actual change over a four-quarter period. Suppose there are four successive quarters each showing an annualized 2.5% decline in GPD. Intrade will add those together and get 10%. But over the year, the annual decline in GDP will acually be 2.5%.

That is quite right. During the Great Depression GDP declined by 8.6% in 1930, 6.4% in 1931 and 13% in 1932. Far larger drops in GDP than 2.5%. Of course, a 2.5% drop in GDP over the course of an entire year would make such a recession a bad recession. Of course, we don’t need 2.5% each quarter for 4 quarters. In the last quarter of 1981, and the first three quarters of 1982 the annualized changes in GDP were -4.9%, -6.4%, 2.2% and -1.5%. Those sum up to -10.6% using the Intrade method whereas actual decline in real GDP over that time was 1.49%.¹ So even though the intrade contract is up to 59% it doesn’t mean we are going to see the kind of GDP declines one might normally associate with a depression.

CHAPTER ELEVEN.

TIME CYCLES IN AMERICAN HISTORY, CONTINUED

(Considering Origins and Roots: The First of Many National Banking Crises)

Let me issue and control the moneys supply

of a nation and I care not who makes its laws.

Mayer Amschel Rothschild, 1790

How do we evaluate our structural time system in light of American history? First, American history is a very short phenomenon. America has only been a consolidated unit, a political entity, for a little over 200 years. 200 years, divided by cycles of 36 years, means that there have only been approximately 6 ½ cycles experienced as American History, 6 ½ days.

Also, it is hard to draw a line that separates and distinguishes early American History from European History on the one hand, and early American History versus American Indian History on the other hand. When does America (as we know her) begin having a unique independent history? We could choose the Declaration of Independence as a likely starting point. Clearly the Revolutionary War against England is a noteworthy mark of individualization. But how do moments like Columbus’ discovery of America (1492), the settlement of the first colonies in Florida under Ponce De Leon (1513) or at Jamestown (1606), or the First Thanksgiving (1619) fit in to this picture? It is not clear.

Midnight 1479

Dawn 1488

Noon 1497

Dusk 1506

Midnight 1515

Dawn 1524

Noon 1533

Dusk 1542

Midnight 1551

Dawn 1560

Noon 1569

Dusk 1578

Midnight 1587

Dawn 1596

Noon 1605

Dusk 1614

Midnight 1623

Dawn 1632

Noon 1641

Dusk 1650

Midnight 1659

Dawn 1668

Noon 1677

Dusk 1686

Midnight 1695

Dawn 1704

Noon 1713

Dusk 1722

Midnight 1731

Dawn 1740

From the Midnight of 1659, for instance, to the Noon of 1677 much probably did happen in America but perhaps not much of real historical significance. And trying to fit events in to my 36-year straight-jacket seems to make little sense. So, for the sake of our study, I will begin with what I’ve suggested to be the moment of American individualization, the signing of the Declaration of Independence and the War of Independence as the starting point of American history.

On a larger scale, it is clear that the time of the American Revolution was a time of Renaissance in the United States – Dawn -- with the founding fathers of the American government being Renaissance Men in the traditional, historical sense, much as those who appeared in Florence, Italy in the Middle Ages. The Renaissance Man is a complete person, a whole person, undifferentiated, containing all the contradictory elements of Day and Night: reason, science, mathematics; poetry, philosophy, music. Being, at the same time, Scientists, Accountants, Lawyers, Engineers, Architects, Warriors, Orators, Statesmen, Gardeners, Men of Letters. The Dawn is a time of Heroic aristocrats, much like the Knights of the Round Table, soldier-leaders in defense of nation or king.

Noon 1749

Dusk 1758

Midnight 1767

Dawn 1776

Noon 1785

Dusk 1794

Midnight 1803

By our time calculations, we would expect 1767 to be a low-water mark in terms of economic strength and self-confidence among American citizens – and we would expect to see a surge from 1767 and 1785 is self-actualization and expansive ego strength.

In 1775, America’s war for independence was initiated against England. We remember that British troops had fired on crowd of American rock-throwers in 1770 (the so-called ‘Boston Massacre’). You would expect the Day-Cycle Ego-Inflation to begin with an act of defiance, and a statement of independence. The ‘Boston Tea Party’ occurred in 1773, at which time American colonists (disguised as Indians significantly) threw crates of English tea into Boston Harbor.

In 1775, George Washington was appointed Commander-in-Chief of the Continental Army. Later in that same year, King George III of England declares a state of open rebellion in the American colonies. On July 4, 1776, the United States of America declares its independence from Britain.

These are all acts of rising ‘masculinity’ one would expect to see in an Ego-Inflation period. ‘Rising Masculinity’ has a symbolic connection to an erection, in the sense of sexual vitality, and also in terms of the primary act of the Day-Cycle masculinity: erecting a city; erecting towers, building, expanding; erecting edifices to the ego (which, itself, as a concept, is a manifestation of an erect digit).

‘I am Number One’ is a rather tiresome sports phrase signifying world conquest, independence, defeat of an adversary, military triumph.

In 1778, American ‘states’ begin the process of ratifying the Articles of Confederation, signaling the voluntary creation on a new political entity, the United States of America.

In 1781, the American colonial army, with their ally France, defeat the British at the Battle of Yorktown, in large part signaling the end of British rule in continental America.

In 1783, The Treaty of Paris is signed by Britain and the United States, declaring victory for the American colonists over the British forces in America.

In 1787, George Washington presided over the Constitutional Convention that drafted the U.S. Constitution that replaced the dissatisfactory Articles of Confederation.

And this is, in large part, the end of the first ‘Day’.

Noon 1749

Dusk 1758

Midnight 1767

We must remember, issues that sparked the American revolution were mainly economic in nature. England made it increasingly difficult for the American colonists to make a living. English Navigation Acts generally involved heavy tariffs on goods imported from the colonies to protect England’s balance of trade. This meant colonists’ costs increased, and profits decreased. Britain also determined that the American colonists would be required to pay a significant amount of the cost of having British troops garrisoned in America to ‘protect’ colonists against French and Indian provocations.

In 1764, the English Parliament passed the Sugar Act, taxing molasses used in America for the making of rum. Then came the Currency Act, which prohibited the American colonies from issuing any form of paper currency.

A severe financial crisis in Britain from 1762- 1772 caused British merchants to call in colonial debts. A credit crisis in 1772 caused the American bankruptcy rate to double. The inability of the American colonists to issue paper money, and generate liquidity, made the monetary contraction even more severe. Benjamin Franklin said later that he felt the Currency Act had created the war of independence.

The Stamp Act of 1765 was the first direct tax ever levied by Parliament on her colonies. All newspapers, books almanacs, pamphlets, civic documents, needed to have an affixed stamp, which showed that the tax had been paid to Mother England. The Stamp Act sparked the ‘no taxation without representation’ slogan of American rebels; and a boycott of British merchandise, triggered by the Stamp Act, caused British exports to America to fall nearly 15% in 1765.

In 1767, British Parliament passed the Townshend Act, which taxed essential goods, such as tea, paper and glass. When American colonists protested, British troops opened fire on the crowd, killing three, and wounding 8 others. This became known as the Boston Massacre – and quickly became a rallying point for colonial revolutionaries.

In 1773, Parliament passed the Tea Act, which was designed to shift the tax burden on imported tea away from the East India Company, which was hurting financially, onto the colonies. This led directly to the Boston Tea Party, a destruction of a tea shipment by American patriots disguised as Indians as a British ship moored in Boston Harbor.

England responded with the so-called Intolerable Acts, four different laws designed to punish American colonists: The Massachusetts Government Act, which modified the Massachusetts charter and banned town meetings; the Administration of Justice Act, by which British soldiers accused of committing crimes in America would be arraigned and tried in Britain, not in America; the Boston Port Act, which closed Boston Harbor until the British had been reimbursed for the American destruction of the tea shipment during the Boston Tea Party; and the Quartering Act, which allowed British governors to house British troops in American citizens’ houses without the permission of the owner of the house.

These last acts made the revolutionary war inevitable.

We should expect to see a strong military presence in the leadership of the country during the Day-Cycle Ego-Inflation. We should also expect to see presidents with a will to empire, to expand the scope of civilization, as opposed to Night-Cycle presidents exhibiting a will to virtue (agrarian virtue even).

We’ll remember that the first Republicans in American politics were the ‘Federalists’, who were ‘urban nationalists’ favoring a strong central government, a national bank, a standing national army, and a strong presidency (or even a king) – and the first Democrats were the ‘Democratic Republicans’ who favored a weaker Presidency, stronger states’ rights, and argued for an agrarian republic as a loose confederation of city-states, more on the Greek model.

The Federalists were the Romans (as the Republicans of today also are); the Democratic Republicans were more the Greeks, if I can use such an historical metaphor. There are reports that the Federalists sought out George Washington, after his generalship had led the American colonists to victory against the British, to accept a kingship to rule America. Washington refused, returning to his farm in Virginia like the great Cincinnatus of Rome, who, after serving as a dictator during a period of Roman crisis, withdrew from public office to return to his farm, out of respect for the Roman republic.

George Washington was a supporter of the republic also; talk of making Washington a king in America fell on Washington’s deaf ears.

The Federalists were the party of merchants and bankers and were strongest in the new cities being formed along the coast of eastern America. The most notorious Federalist was Alexander Hamilton, who after being George Washington’s chief of staff during the war, became his Secretary of the Treasury after Washington became America’s first president. Hamilton made many powerful enemies quickly, much as Henry Paulson would 200-some years later.

If there is usually a ‘wounding’ of a Sun-Hero present at the end of this period of Ego-Expansion, it is difficult to find this in 1785. Perhaps the disbanding of the Continental Army is the closest act to this ‘wounding’ of the Male Principle, which occurred in 1783, since this wounding is often a form of castration, a reduction of male virility, either self-inflicted (this was often the case in ancient myth) or castration perpetrated by the Dark Brother, bringing on Darkness. Perhaps George Washington’s refusal to consider being America’s king might also be considered a kind of symbolic self-wounding. But this is somewhat dubious.

One thing we want to remember is that the Day-Cycle Ego-Inflation is, by definition, a taking on of debt (financial debt, as well as karmic debt) while the Night-Cycle Ego-Deflation is a coming to terms with the debt accrued by this Day-Cycle expansion of the will. And by ‘coming to terms with debt’ I mean this in a metaphorical or metaphysical sense, but also in a very real concrete sense.

The successful war against England resulted in a new, virile, proud nation appearing suddenly on the world stage. It also cost a lot of money to fight England, money the American colonists did not really have. When the war ended, American states were deeply in debt.

Ego-Inflation often involves the fighting of a foreign war; Ego-Deflation always involves financial depression, social chaos, and disunity brought on by debts accrued during the ‘living large’ that occurs during Ego-expansions.

Noon 1785

Dusk 1794

Midnight 1803

As such, we expect to see a financial and spiritual depression occurring between 1785 – 1803.

Robert A. Becker writes in A Companion to the American Revolution:

The states ended the war, as did Congress, with massive debts to pay. Virginia’s public debt stood at 4,250,000 pounds in 1784; Massachusetts’ (debt) at about 1,500,000 pounds in 1785. The state debts included money owed for supplies, their old depreciated war currencies, some of which still circulated, and debts owed to soldiers for back pay. The post-revolutionary states regularly allocated 50% to 90% of their revenues to pay the interest they owed on their revolutionary debts. To raise it, and some principal, the states levied heavy new general taxes, and tried where possible to collect indirect taxes, such as imposts – the very revenues Congress wanted to appropriate for the national debt. The politics of postwar finance and taxation in every state was, then, a matter of vigorous an occasionally violent dispute….

The legislature’s refusal to relent on its deflationary debt policy in the midst of the postwar depression was in part responsible for the outbreak of rioting in western Massachusetts known as Shays’ Rebellion. Throughout the new republic, as taxes rose to sink the states’ debts in the midst of deflation and depression, angry taxpayers began demanding relief – tax abatements and postponements, the right to pay in virtually any sort of outstanding ste or federal notes or certificates, or to pay in commodities and produce. Most state (Massachusetts excepted) adopted extensive tax relief programs in the mid-1780’s…

General Henry Knox, the Commander of U.S. forces who opposed tax rebels in 1786, wrote:

As the situation worsened in 1786 armed bands of impoverished debtors forcibly prohibited courts from sitting including the Court of Quarter Sessions in Worcester County. Violence was most intense in New England and the Northeast, where population pressures combined with depleted soil to press subsistence [sp] farmers to desperation. Rioting mobs intent on preventing the enforcement of judgements [sp] against debtors struck in many areas, including New York, Connececut [sp], Vermont, New Hampshire, Rhode Island, and Massachusetts.

In Massachusetts, Connececut [sp], and Rhode Island the discontent was organized along military lines. thousands of men, commanded by continental army Veterans and current officers of the Massachusetts state militia, were organized into rebel regiments."

The most important military engagement of these revolts was Shays' Rebellion, a battle for a Federal arsenal at Springfield, Massachusetts, on January 25, 1787.

Their Creed is, that the property of the United States has been protected from the confiscations of Britain by the joint exertions [sp] of all, and therefore out to be the common property of all; and he that attempts opposition to this creed is an enemy to equality and justice and ought to be swept from the face of the Earth.

‘Common property’ being one of the key words here. The driving ethic of the Night-Cycle is the ‘public good’, the ‘common weal’. The driving ethic of the Day-Cycle (and we must remember that individual souls cycle between the Day and the Night, becoming the things/ideas they once hated, and hating the ideas that once composed and embodied them – gave them a body of expression) is ‘private enterprise’, the ‘rights of the individual’, ‘personal destiny’.

War against a foreign enemy is a keystone of the Day-Cycle expansion. Civil war between the rich and poor is a keystone of the Night-Cycle contraction.

Another key to understanding this duality is that, like Prometheus, the Day-Cycle elementals (Federalists and Nationalists in this context) are forward-looking, with an overriding will to re-create the future. Like Epimetheus, the Night-Cycle elementals (the Anti-Federalists and Democrats) are backward-looking or reflective, romantic. They want time to stop, because, in the Night-Cycle, time, in a sense, does stop. The Night-Cycle takes over when the future begins to look dark and threatening. The Day-Cycle takes over when the light illuminates the future, making it appear bright and hopeful. The eyes takes over again (the ‘I’s’ take over); after the ears have ruled through the Night.

Night-Cycle elementals are pessimistic because there is no light: the mind is darkened. The Future is gone; the Future is black and threatening. Night-Cycle elementals have to feel their way through the labyrinth of darkness by touch and by sound.

Day-Cycle elementals are optimistic because, suddenly, there is light again. The positive vision of the Future re-appears.

As I have suggested, the Federalists were wedded to the Roman model, empire through the power of the modern city-state become a megalopolis, which is a cultural/political form of the body. The Anti-Federalists were wedded to the Greek model, agrarian in nature, where the power resided in the city-states and not in any megalopolitan capital city. The Anti-Federalists did not want a powerful capital in Washington; they did not want a standing federal army; they did not want a centralized national bank. The Federalists wanted all of this.

The Federalists wanted money, glamour, power, on an international stage. They wanted to actualize their ego, in psychological terms. They wanted to manifest their daemon, their inner, driving will to power. The Federalists were endowed with outward manifestation. The Anti-Federalists wanted to follow the more humble path. The Anti-Federalists were endowed with inward-manifestation.

The Federalists, like the good Westerners they were (Cowboys, if you will), believed in the straight line. The Federalists were driven more by the ideal of Freedom – freedom of expression of the private individual’s will to power. The Anti-Federalists, taking a much more Eastern view (Indians were, of course, originally rooted in the East), believed in the circle. Anti-Federalists were driven more by the ideal of Equality – a republic of equal citizens wherein the public well-being trumped the individual’s desire to become gigantic. Of course, everything is relative. Most of the Anti-Federalists wanted a public utopia based on equal white land-owning male citizens. In practice, there was almost no equality in the realm of the Anti-Federalists. Peasants (white, black, brown, yellow or red), women or slaves had no claim to equal rights in this system. This was a fantasy carried around in the minds of the Anti-Federalists, based on a distant memory of life in classical society (Greek more than Roman).

It is very easy to judge the past from the moral high-ground of the present (which may also appear as a moral travesty to historians in the future). It is not, however, very instructive. The moral high-ground is an easy hilltop to command. It is commanded by religious racists on one polar extreme, and by anti-religious snobs on the other.

The truth, in terms of seeing the world clearly and accurately, in so much as there can be any truth at all, is found in the center of the world, where the Renaissance Men stand with one foot in each world, part scientist, part mystic, part engineer, part artist, part accountant, part poet. The Renaissance Man is the first man, and also the last man, in his transformation in to the Romantic Man. The Renaissance Man is the whole man, the perfected man. The world, in its historical cycle, journeys away from the Dawn, away from completion, away from the balance, deeper and deeper into Day or Night. The Renaissance Man stands for ever in the center, with feet in both world. He does not move; but he waits for Time to draw back toward him; and to draw him back toward his opposite, the Romantic Man, the Dusk.

The paradox of American worship of the concepts of Freedom and Equality has been and will always be a problem for the country. Freedom implies, even necessitates, a lack of equality. If a man is free to succeed, another is free to fail. Equality, unless it is modified by attaching the modifier ‘of Opportunity’, takes us back more to our roots in Puritan times, wherein all members of the congregation lived in a kind of communal semi-paradise of equal souls devoted to the worship of God. Communism is a form of enforced equality (the horizontal view, the flatline) that cannot last simply because it resists the law of nature to expand when expansion is required.

Freedom is the Vertical Axis, the Masculine, Day-Cycle Axis.

Equality is the Horizontal Axis, the Feminine, Night-Cycle Axis.

The original Anti-Federalists resisted the vision implicit in the birth of America, resisted the English model of manifestation (King, mercantile republic, and empire) because they feared the ultimate outcome of such a masculine life-cycle. What happened to Rome, after the fire of will (expansion) died out? Barbarians are implicit in this picture of history. Goths, peasant-warriors, dark-skinned agents of the Night over-running the decadent World-City is a frightening nightmare that haunts the edges of the Daylight.

This nightmare arms the Day-Cycle Energy to drive the periphery back, to expand the circle through an expansion of empire.

But the nightmare doesn’t leave. Day-Energy expires; and the heathens, huns, and barbarians appear again, in pagan attire, like Nat Turner in the moonlight.

The new terror in the Western mind is the Islamic terror that lives on the border, a black light thrown up by the crescent moon, a heathen worshipping the God of destruction, the creator of deserts, the defiler of civilization and the proponent of eternal poverty and self-enslavement.

The struggle between Cowboy and Indian, Day and Night, Federalist/Nationalist and Democratic/Republican/Anti-Federalist was nicely symbolized in the furious rivalry displayed between Alexander Hamilton (urban empiricist plutocrat) and Thomas Jefferson (agrarian democrat ). Here we see Dionysus standing toe-to-toe with Apollo. The practical intellectual Hamilton going out toward the Sun, seeking to build the world of forms, bank towers, edifices of man’s virile will, seeking as Man to become a god of creation, and the dreamy intellectual Jefferson going back toward the Moon, seeking to preserve the world of form as it was, as Nature had made her, implicit in Nature’s sense of modesty and balance.

Hamilton was a republican only in the broadest sense of the word: republican, with a strong taste for monarchy. He believed that the rich should rule the world; that the poor had no place in government and no aptitude for governing the world. He felt that the bankers should guide the world. And that government should work with the banks to establish an empire that controlled the world in orderly progress and enlightenment. This was a white man’s world, of course.

Hamilton was a complex man, with a craving for knowledge, and a hunger for power. He was born in the British West Indies as a bastard child to Rachel Lavien (from a ‘respectable’ family who had abandoned her husband and children) and James Hamilton (the fourth son of a Scottish nobleman, who was described later by his son, Alexander, as ‘unlucky’ and ‘indolent’). By the time Alexander was 16, he had graduated from being a clerk in a St. Croix office to managing the firm while the two owners traveled on business. Hamilton fell under the influence of Hugh Knox, a Scotch-Irish Presbyterian minister, who became Alexander’s intellectual mentor. Knox collected money from his congregation to send 17-year-old Alexander to America to study formally. Hamilton, who had mastered both Greek and Latin, petitioned Princeton (the College of New Jersey) for admittance and for the right to accelerate his education at his own pace. This second request was denied. Hamilton then enrolled at King’s College (now Columbia University) in New York City, where he did accelerate his education. Hamilton, while attending college, became embroiled in the colonial struggle against England, participating by writing articles and broadsides supported colonial rights against the English imperative. Hamilton’s 1774 pamphlet, A Full Vindication of the Measures of the Congress, was recognized by America’s revolutionary thinkers as a significant new contribution demanding rights for American colonists. A year later Hamilton joined the New York State Militia; and the following year, he was appointed the captain commander of a New York artillery company. Hamilton saw considerable action in the battles of New York and New Jersey, including George Washington’s surprise attack on Trenton and the subsequent Battle of Princeton. Soon, Hamilton had a new mentor, Commander-in-Chief George Washington. Washington appointed Hamilton as his aide-de-camp, and later promoted him to lieutenant colonel in the Continental Army.

Hamilton wished an independent military career; Washington would not let him go; Hamilton provoked a confrontation with Washington in 1781, which forced Washington to finally accept his resignation. Hamilton returned to his artillery division in New York – and, in October 1781, Hamilton helped to lead a successful attack on the British fortifications at Yorktown.

In 1780, Hamilton married Elizabeth Schuyler, from one of the first families of New York – an exceedingly successful marriage for Hamilton, but one that would indirectly cost him his life. They would have eight children together.

After the war, Hamilton studied law, served in the New York legislature, and served as a delegate to the Congress, where he met and worked with James Madison. Hamilton returned to New York, opened a legal firm, and continued to participate in the intellectual life of the new country through his regular political writings. He criticized New York laws that punished British loyalists who had fought with the British against the revolution; he defended loyalists against these laws in the courtroom; and he also helped found the Society for Promoting the Manumission (Emancipation) of Slaves. In 1784, he helped to establish the Bank of New York and became a director of this bank.

Hamilton abhorred the Articles of Confederation, the original U.S. Constitution, that had been ratified in 1781. Hamilton felt the Articles were weak, inapplicable for a rising power, said too little or nothing about the minting of a currency and about interstate trade – in other words, they weighted authority in the new nation too much toward the impotent state governments and not enough toward a united central government in Washington DC.

Charles Putnam Nettels, in his The Emergence of a National Economy, 1775-1815, writes:

The men who deplored the weaknesses of the postwar economy ascribed them to certain features of the central government under the Articles of Confederation. Congress lacked the power to tax and therefore suffered the inadequacies of poverty. Since the states alone could levy duties on imports and exports, Congress could not create a national free-trade area or put pressure on foreign powers by means of concessions or reprisals. The states possessed the decisive powers over money and credit and did not use them to provide the country with a uniform and stable currency. The Articles did not equip the Union with the money or the authority essential for sustaining a national army. Lake of military force and of diplomatic prowess enfeebled Congress in its efforts to deal with the formidable problems of the West.

The men who wished to strengthen the central government and who took an active part in the movement for the Constitution were designated in 1787-89 as both ‘nationalists’ and ‘federalists’. Neither word describes accurately the opinions of all the leaders who then supported the cause of ‘a more perfect union’. If only one word is used, ‘nationalist’ is preferred, for the majority of the unionists then sought to devise a government that would be national to scope and character. However, most of the ‘nationalists’ did not advocate a central government of unlimited power. Most of them preferred to leave extensive powers with the states. The kind of government which the ‘nationalists’ wanted becomes evident when one reviews the purposes they sought to attain, since the essential nature of a thing is indicated by the objectives it is designed to realize.

The original aim of the ‘Nationalists’ was to provide for the payment in specie of the wartime debts of the Union. The depression of 1785 then [led to the emphasis of] other interests. These included the creation of a single, stable, national currency based on coin – a reform that called for the surrender by the states of their power to issue paper money. The nationalists also wished to deprive state legislatures and state courts of their then uninhibited power of favoring debtors at the expense of creditors. In addition, the nationalists desired to make the central government equal to the task of enlarging foreign markets for the exports and the shipping of the Union. A comparable interest was also that of enabling the central authority to foster domestic manufactures. Also, many nationalists regarded a strengthened Union as essential to the defense of the West and to the effective development of its resources. Finally, the social unrest of the 1780’s convinced apprehensive men that a potent national government was needed for the suppression of domestic insurrections that might menace the owners of private property.

The rich were not being effectively protected under the Articles of Convention. Debtors were favored over creditors (banks). Private property was not being protected (there was no army to protect private property) against the angry poor who were being imprisoned and having property foreclosed for being unable to pay the tax designed to pay off the heavy debt burden caused by the Revolutionary War.

Nettels concludes:

To achieve these objectives the nationalists deemed it necessary to endow Congress with several additional powers, of which the most fundamental was the power of taxation. The central government should also be vested with the supreme authority over money. To the end that the diplomacy of the Union might be invigorated, the states should give up the right to levy duties on imports, and Congress should be granted the exclusive power to regulate both foreign and interstate trade. Congress should also be empowered to maintain a national army that would function independently of the states. For efficient action in the West, the central government needed the authority to supervise the Indians and to regulate the territories of the Union.

The nationalists anticipated that such powers might be used both to stimulate economic activity and to protect established interests. The grant to Congress of adequate powers over commerce and money would make possible the establishment of a single trading area to which every American merchant would have free access; the abolition of the confusing currencies, commercial codes, and tariffs of thirteen individual states would so simplify and facilitate business as to give a vigorous spur to enterprise. Once the states had lost the right to impair commercial contracts, interstate commerce – dependent as it was upon credit – would receive a fresh impetus from an enhanced feeling of security among traders. If the Union should provide for the payment in specie of the interest on the national debt, public securities would acquire a durable value, and would, in effect, increase the supply of currency, thereby giving new life to production and exchange.

Who could not support such a change? Alexander Hamilton supported these changes, championing a strong centralized government, with a professional military, and a national bank to enrich American citizens and American business and to finance America’s debt. But was Hamilton, at heart, a loyalist himself, a supporter of monarchy, an opponent of a democratic America?

On June 16, 1787, Alexander Hamilton spoke for 6 hours as a member of the Constitutional Convention, speaking for a strong national government, with state governments being tributaries of the powerful centralized Sun in Washington. He spoke openly of his admiration of the British government, an admiration that left many fellow delegates wondering if he wished the strong federal government to be overseen by a form of monarchy. Hamilton stated his desire that state governments be extinguished, for ‘they are not necessary for any of the great purposes of commerce, revenue or agriculture.’ Better would be "district tribunals: corporations for local purposes."

Madison wrote: ‘He sees evil in the states that must soon cure the people of their fondness for democracies.’

Hamilton spoke to the Convention:

All the passions we see, of avarice, ambition, interest, which govern most individuals and all public bodies, fall into the current of the states and do not flow into the stream of the general [national] government .... How then are all these evils to be avoided? Only by such a complete sovereignty in the general government as will turn all the strong principles and passions [to] its side…. Take mankind in general, they are vicious - their passions may be operated upon. Take mankind as they are, and what are they governed by? Their passions. There may be in every government a few choice spirits, who may act from more worthy motives [but] one great error is that we suppose mankind more honest than they are. Our prevailing passions are ambition and interest. Wise government should avail itself of those passions, to make them subservient to the public good.

Hamilton did not trust putting power in the hands of human beings. He later wrote: "It has been observed that a pure democracy, if it were practicable, would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies, in which the people themselves deliberated, never possessed one feature of good government. Their very character was tyranny: their figure deformity.”

Hamilton feared anarchy even more than he loved freedom. Hamilton desired order even more than he feared the tyranny of a centralized government.

Thomas Jefferson, on the other hand, put freedom ahead of order. His fear of a federal tyranny was greater than his fear of anarchy brought on by a weak central government. That is, he trusted the common man more than he trusted the rich.

Hamilton returned to New York after the Constitutional Convention and began (with James Monroe and John Jay) writing a series of Federalist Papers, which argued emphatically for the ratification of the newly proposed U.S. Constitution, which would deliver more power to the federal government. The Federalist political party took its name from these political broadsides.

We will remember that the Day-Cycle Force is monotheistic at heart, tyrannical in the extreme, and autocratic by nature. Why is this so? The Day is ruled by One Heavenly Force, the Sun. The Day-Cycle Force admires a king, desires a form of king, despises committee discussions and lack of will demonstrated as democratic compromise. The Day-Cycle Force sees the world clearly, knows what it wants, and doesn’t want people standing in his way.

Jefferson did not trust Hamilton’s sympathy for monarchies. He was opposed to Hamilton’s centrifugal philosophies. (Centrifugal, had the latin root, ‘fugere’: to flee, fugitive; centripetal, in contrast, had the Latin root ‘petere’: to go, to seek. One implies criminal activity; the other implies an intellectual quest.)

The reader can see from this example the duality (and misunderstanding) built in to all creation. Hamilton’s philosophy is centrifugal in the sense that he seeks to draw himself as an individual, through power, away from his human center, into the heights of an inflated God-like persona, fulfilling a personal destiny, such as Ahab did. In another sense, Hamilton argues for the centripetal philosophy of the scattered political forces of America to be drawn back in to a centralized power core in Washington DC. Nothing is ever as simple as it first appears, especially when considering abstract (and often paradoxical) metaphor-structures.

When George Washington was elected President in 1787, he nominated Jefferson to be his Secretary of State; and he nominated Hamilton to be his Secretary of the Treasury – in much the same way that Gandhi wanted India’s first government to be composed of Muslims and Hindus, implacable adversaries. Sure enough, Jefferson and Hamilton soon were in full-scale opposition.

Hamilton’s philosophy embraced a concentration of power in the hands of the elite few; and held humans to be innately flawed. Jefferson’s philosophy embraced a decentralized power that was spread among many people and at many levels through many institutions; honored the human spirit; and believed that education could perfect flawed human beings.

Hamilton’s vision embraced success founded upon business and through the wealthy old-money aristocracy; he admired the class system based on the English model; he wanted to make America into a new Europe; he desired to advanced into the new technological age; and he saw the American future fixed in Atlantic coastal cities whose power expanded through business and international trade. Jefferson’s vision was founded in the farming community; he favored mild laws and equal opportunity and an ‘aristocracy of ability’ rather than an old-money aristocracy; he envisioned American as an asylum for the world’s oppressed; he desired to preserve America’s simplicity and equality and desired an expansion westward, away from Europe; he wanted America to avoid the corruptions and the political antagonism and snares of Old World Europe.

In foreign policy, Hamilton favored Britain, and opposed the ideas of the French Revolution. Jefferson favored France, and supported the ideas of the French Revolution.

The opposition of these two ‘brothers’ (the Light and Dark Brothers) finally came to a head over Hamilton’s proposal to create a National Bank to finance American’s debt and create an American money supply (that would ultimately be controlled by the old-money American Ruling Class along the East Coast seaboard).

Robert R. Blain writes in his paper ‘United States public and private debt: 1791 to 2000’:

One problem was Revolutionary War debt . . .

The problem faced by the First Congress was Revolutionary War debt. Under the Articles of Confederation, Congress had been unable to collect the taxes needed to pay interest on that debt, so the debt had grown by compounding interest from about $40 million to $75 million. The Constitution strengthened the central government precisely to collect taxes to pay interest on the debt. Abraham Lincoln at Gettysburg may have said that the new nation was "conceived in liberty" but the Constitution was conceived in debt.

The other problem was no money supply . . .

As a new nation, the United States needed to create a money supply. Congress could have created that money by the authority given it in the new Constitution: "to coin money and regulate the value thereof." It chose instead to use the authority also given it in the Constitution to borrow money. The choice was fateful. It shifted control of the country's money from Congress to its creditors, private bankers.

Hamilton's "funding" plan . . .

The funding system that was adopted was recommended to the First Congress by the first US Secretary of the Treasury, Alexander Hamilton. He was a banker and a plutocrat. He believed that wealthy people should rule the country. He distrusted the common people. So Hamilton recommended a "funding system" -- an odd name because no funds were created -- that put the wealthy in control of the money supply and, therefore, the country. The first step was that Congress pass a law obligating itself to pay interest to holders of Revolutionary War debt certificates. By so doing, Hamilton argued that people would consider the debt certificates valuable and would exchange them for goods and services, thus the debt certificates would circulate as money.

Hamilton's Bank plan . . .

The second part of Hamilton's recommended plan was to allow holders of debt certificates to use them to buy stock in a national bank that Congress was also to charter, The Bank of the United States. That bank would create the country's money as loans costing interest. By putting these two parts of the plan in place, the $75 million debt would become the base for a growing money supply, but all of it as debt.

Interest causes debt to compound . . .

The problem with Hamilton's plan was that interest had to be paid on the debt-circulating-as-money. If the debt certificates were used to pay the interest, the money supply would shrink and money shortages would cause economic recessions. To maintain debt-money in circulation, owners of the debt, the creditors, would add more debt to what was already owed. So debt would grow at about the rate of interest forever. After 200 years of debt money, total public and private debt has grown to about $20,000,000,000,000. That's $20 trillion, and it will continue to grow, like a snowball rolling downhill, by ever-larger amounts.

Why did they do it?

If such a system had caused bankruptcy is so many cases in Europe [Florence, Genoa, Venice, Spain and England] why did members of the First Congress adopt it? On January 28, 1790, a few days before his speech to the First Congress predicting a debt explosion, [Congressman] James Jackson gave another speech in which he accused [certain] congressmen of sending agents throughout the country to buy up the depreciated debt certificates before Hamilton's plan became known to the public. In this way, these congressmen would own the certificates when the Funding Act was passed into law and the value of the certificates appreciated to their face value. Then, they and their friends would become stockholders in the new Bank of the United States and profit from interest and growing debt.

Some people protested . . .

At the time, James Callender, reporter for the Philadelphia Gazette, wrote: "The funding law was passed through Congress by the influence of a majority, who purchased certificates from the army at under value: and who voted for the law, with the single view of enriching themselves. It is firmly believed and loudly asserted, by at least one half of the citizens of America, that the funding system was devised, not for the sake of paying the real creditors but of wronging them. Hamilton planned. Congress voted. The president approved."

In a letter to the editor, a 'farmer' protested: "Such injustice and oppression may be colored over with fine words; but there is a time coming, when the pen of history will detect and expose the folly of the arguments in favor of the proposed system, as well as the iniquity."

The precedent became practice . . .

After warning that, "A funding system will be highly dangerous to the welfare of the Republic…[that] it must hereafter settle upon our posterity a burden which they can neither bear nor relieve themselves from," James Jackson added: "It will establish a precedent in America that may, and in all probability will, be pursued by the Sovereign authority, until it brings upon us that ruin which it has never failed to bring." That is exactly what happened.

Why didn't someone stop it?

Thomas Jefferson tried to stop it. He warned, "If the American people ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless.... The issuing power of money should be taken from the banks and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions (having the issuing power of money) are more dangerous to liberty than standing armies. My zeal against these institutions was so warm and open at the establishment of the Bank of the United States (Hamilton's foreign system), that I was derided as a maniac by the tribe of bank mongers who were seeking to filch from the public."

Hamilton argued that ‘a national debt attaches many citizens to the government who, by their numbers, wealth and influence, contribute more perhaps to its preservation than a body of soldiers.’ In other words, if the wealthiest citizens have a stake in the preservation of the government, the government will probably be preserved. If the government is good for the rich, then the government is good for everyone.

Jefferson answered: "I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man."

When President Washington asked his cabinet to speak on this issue, Jefferson argued that the National Bank proposal was unconstitutional; the Constitution did give Congress the power to tax U.S. citizens and to provide for the general welfare of Americans. But these powers needed to be interpreted narrowly. ‘To provide for the general welfare’ said nothing about a National Bank.

Hamilton argued for a very broad reading of the Constitution. He wrote: ‘It is conceded that implied powers are to be considered as delegated equally with express ones. Then it follows, that as a power of erecting a corporation may as well be implied as any other thing, it may as well be employed as an instrument of means of carrying into execution any of the specified powers, as any other instrument or mean whatever... A bank has a natural relation to the power of collecting taxes - to that of regulating trade - to that of providing for the common defense... [Therefore] the incorporation of a bank is a constitutional measure...’

Washington was convinced by neither argument. But he took Hamilton’s side. The Bank of United States opened its doors in Philadelphia in 1793.

In 1793, Congress investigated corruption in the financial dealings of Alexander Hamilton. Hamilton admitted making illegal payments to James Reynolds, a convicted swindler whose release from prison had been hastened by Hamilton’s Treasury Department. Hamilton admitted to members of Congress that he had made bribery payments to Reynolds to prevent him from publicly disclosing an adultery Hamilton had committed with Reynolds’ wife Maria. The matter died in the Congress. Many historians believed that Hamilton concocted the story of the affair to cover-up illegal insider-selling of information that profited Hamilton’s friends. A private indiscretion was easier for the public to forgive than a banking scandal perpetrated by the Secretary of the Treasury.

In 1801, Alexander Hamilton’s son Philip exchanged insults with George Eacker, a 27-year old lawyer who had proclaimed in a speech that Alexander Hamilton was a traitor who would be willing to try to overthrow a Thomas Jefferson presidency by military force. The two met in a duel on November 23. Eacker shot Philip Hamilton, who died one day later.

In 1804, after years of bitter acrimony with New York state rival Aaron Burr (Thomas Jefferson’s Vice-President, 1800-1804), the man who had unseated Hamilton’s father-in-law Philip Schuyler as senator of New York, Hamilton fought a fatal duel with Burr. On the morning of 11 July, Burr mortally wounded Alexander Hamilton, who died the next day.

With the death of Hamilton -- Federalist leader George Washington’s had died in 1799 – and with the retirement of John Adams, the Federalist party essentially withered, never regaining the presidency nor control of Congress. The only real influence of the Federalist party from 1816 through 1824 was through Supreme Court Justice John Marshall.

In 1824, the Democratic-Republican party collapsed when Speaker of the House Henry Clay essentially stole the election from Andrew Jackson (the political descendant of Thomas Jefferson), using his position and influence in the House of Representatives to throw the election to John Quincy Adams, even though Jackson had received the majority of electoral votes in the general election. Most surviving members of the Federalist Party soon after joined with Clay and other anti-Jackson Democratic-Republicans to form the National Republican Party, which soon thereafter morphed in to the Whig Party.

Democrats dominated the national American political landscape from Thomas Jefferson’s first election as president in 1800 until the election of Whig candidate William Henry Harrison in 1841. But not all was well in the Democratic party. Ideological divisions like the division between Jackson and Adams first appeared in the early 1820’s. The rift between the northern Democrats and southern Democrats also became a fissure in the 1850’s as the issue of slavery divided the nation. Democrats fought over the nomination of who should succeed James Buchanan as President. Northern anti-slavery democrats left the part to join the new Republican National Union Party, headed by Abraham Lincoln. As the war dragged on, northern Democrats divided into War Democrats (who supported Lincoln) and Peace Democrats (who did not support Lincoln); southern Democrats formed their own party.

The new Republican Party controlled the White House until 1884.

The Democratic Party was split into two factions: the first and the dominant faction, was the pro-business Bourbon Democrats, led by Samuel Tilden and Grover Cleveland, representing mercantile, banking and railroad interests, opposed imperialism and overseas expansion, supported the gold standard, fought against tariffs, high taxes and corruption. (This all sounds very much like the current Republicans, except for the imperialism issues.) The second faction, Agrarian Democrats, were more connected to the original party of Jefferson, and eventually overthrew the Bourbon Democrats in 1896. The Agrarian Democrats vigorously attacked Eastern moneyed interests, demanded ‘Free Silver’ – unlimited silver coin minting sought by the poor, indebted classes of the West and opposed by the hard money Eastern conservatives -- and nominated William Jennings Bryan to run for the presidency in both 1900 and 1908 – which elections he lost to Republican William McKinley.

An attempt to replace the Democratic Party by an alliance of north, south, and western farmers – the Populist Party – failed to gain significant following in the later 1880’s.

The Democrats gained control of the House of Representatives in 1910; and Woodrow Wilson, a leading intellectual progressive, was elected president in 1912 and 1916 – and Wilson helped passed progressive tax, antitrust, tariff laws, and the creation of the Federal Reserve. Wilson’s election in 1912 became possible because Theodore Roosevelt and William Howard Taft divided the Republican vote.

The Republicans regained national power in 1921, electing Warren G. Harding as president. Harding promised ‘a return to normalcy’, which meant a return to the laissez-faire policies of the William McKinley era, rejecting the progressive policies of the Wilson democrats. Laissez-faire meant pro-business, lower taxes, repeal of wartime ‘excess profits’ legislation, reduction in railroad rates. Harding also called for the abolition of lynching – but, not eager to make enemies in his own party, or with southern Democrats – he did not fight for this issue. Harding is regularly ranked by academicians as one of America’s worst presidents.

The Republicans dominated the White House through the Roaring Twenties; and Republican Herbert Hoover was president in 1929 when the economic bubble burst in 1929. After that, voters wanted nothing to do with Republicans for almost 25 years. Franklin Roosevelt served as America’s president throughout the Great Depression and World War II; and his New Deal liberal policies meant the promotion of social welfare, labor unions, civil rights and regulation of business. The opponents of these liberal policies began to call themselves ‘conservatives’, stressing support for long-term economic growth, low taxes, support for business. It took an entire generation, however, for Americans to forgive Republicans for having demolished the American economy in 1929 – I expect a similar type of reaction to the destruction of the economy in 2007.

Republicans eventually hammered together a coalition between conservatives and white southerners who opposed big government, civil rights, Johnson’s Great Society liberalism – the so-called ‘Southern Strategy’ – to push Richard Nixon to power in 1969 – but, in fact, Democrats dominated the White House from 1933 through 1981 with little Republican resistance.

Only with Ronald Reagan’s revolution in 1981 did power shift in America back to Republican business coalitions. This business culture has dominated American politics since 1981, until the election of Barak Obama in 2008.

We can not go back to endless cycles of bubble and bust.

We can't continue to base our economy on reckless speculation

and spending beyond our means. I did not come here to pass

our problems on to the next president or to the

next generation. I'm here to solve them.

Barack Obama 2009

CHAPTER TWELVE.

TIME CYCLES IN AMERICAN HISTORY: CONCLUSIONS

(Who Are the Chess-Pieces; and What Moves the Chess-Pieces)

Our aim is not to do away with corporations; on the contrary, these big aggregations are an inevitable development of modern industrialism, and the effort to destroy them would be futile unless accomplished in ways that would work the utmost mischief to the entire body politic. We can do nothing of good in the way of regulating and supervising these corporations until we fix clearly in our minds that we are not attacking the corporations, but endeavoring to do away with any evil in them. We are not hostile to them; we are merely determined that they shall be so handled as to subserve the public good. We draw the line against misconduct, not against wealth.

Teddy Roosevelt, 1902

When I first began writing this book I was quite certain that political/economic cycles would show a pretty clear definition of political alignments showing Republican political power (Pro-Business, low-tax, anti-government) connected with Day-Cycles (Ego-expansion) and Democratic political power (pro-workers, high-tax of the rich, government support of welfare services) connected with Night-Cycles (Ego-contraction). I believe this is so, for the large part. However, the history of America’s political parties, fragmented, shape-shifting, issue-oriented, makes this somewhat difficult to show.

What is clearest to me, now, is that the individuals or even the parties in power during the Day/Night cycles of American history matter much less than do the Day/Night cycles themselves. The atmosphere and events created by the Day/Night cycles, themselves, dominate the political scene much more than do the chessboard figures who are elected and who govern.

In a very real sense, I see Apollo and Dionysus (we know these two forces by many names) moving pieces

For instance, looking at the Twentieth Century:

1901 – Theodore Roosevelt, Republican, elected President

Dusk 1902

1909 – William Howard Taft, Republican, elected President

Midnight 1911

1913 – Woodrow Wilson, Democrat, elected President

Dawn 1920

1921 – Warren G. Harding, Republican, elected President

1923 – Calvin Coolidge, Republican, President

Noon 1929 – Herbert Hoover, Republican, elected President

1933 – Franklin Delano Roosevelt, Democrat, elected President

Dusk 1938

1945 – Harry Truman, Democrat, President

Midnight 1947

1953 – Dwight David Eisenhower, Republican, elected President

Dawn 1956

1961 – John F. Kennedy, Democrat, elected President

1963 – Lyndon B. Johnson, Democrat, President

Noon 1965

1969 – Richard Nixon, Republican, elected President

Dusk 1974 – Gerald Ford, Republican, President

1977 – Jimmy Carter, Democrat, elected President

1981 – Ronald Reagan, Republican, elected President

Midnight 1983

1989 – George Bush, Senior, Republican, elected President

Dawn 1992

1993 – Bill Clinton, Democrat, elected President

Noon 2001 – George Bush, Junior, Republican, elected President

2009 – Barak Obama, Democrat, elected President

It is clear to me that the Republicans dominated the Day Cycle 1983 – 2001. Yes, Bill Clinton was elected as a Democrat in 1993. However Bill Clinton was the most Republican-like of Democratic presidents since Woodrow Wilson. He kept his hands off U.S. Business interests, he did not pass any significant social legislation or tax heavily the country’s rich, and he did not alienate Wall Street with regulations to safeguard investors from cannibal Wall Street operators. In fact, he helped to dismantle restrictions on Wall Street that had been in place since FDR. Clinton backed off early attempts to pass a national health system when Republicans resisted and the public seemed indifferent.

By the same token, the Night-Cycle of Democratic rule (1965-1983) was interrupted by Richard Nixon’s administration – but not really. What kind of Republican was Richard Nixon really? This is the man who traveled to ‘Red China’ and recognized diplomatically the communist leadership of Mao Tse Tung and his followers. Nixon is also the man who tried to manage the marketplace with price controls and deficit spending to try to achieve ‘full employment’.

Clinton and Nixon were alike in many ways, political animals of great capability, willing to do almost anything to be elected and to stay in power. Chameleons; charmers; intelligent survivors who were both in power while swimming against History’s current.

The Day-Cycle 1947 – 1965 is a Republican phase, defined more by Eisenhower than by anyone else in that period. The 1950’s was America’s most conservative, conventional decade. The fact that a Democrat, Harry Truman, kicked off the cycle, and another Democrat, John Kennedy, closed it, does not really change the nature of the cycle. John Kennedy was not too clearly a liberal; he did not run as a liberal, but as a handsome prince who made American seem like Camelot. And when Kennedy began to show his liberal nature, first through support of civil rights legislation, and then through a perceived weakness in Cuba and the overthrow of Fidel Castro, well the conservative Ruling Class in America had him murdered. Then all hell broke loose – which is another way of saying that Dionysus took over, Night fell, and the Democrats took over the country and managed it through the ego-death boat ride into the Underworld by Moonlight.

The Night-Cycle 1929 – 1947 was, again, all Democratic. The Republicans, and their laissez-faire policies with regard to business graft, collusion, price-fixing and stock market manipulation created great paper wealth in the 1920’s but, as before, and as after, they ran the ship into a rock.

The Democrats managed the country through the chaos of the Great Depression and World War II. Republicans now argue that the Democrats created the Great Depression by trying to over-regulate business after the crisis and by not flooding the system with enough money when the depression first started (now they seem to be saying that Obama is creating a crisis because he is trying to flood the system with more money through government spending) – it’s all quite confusing.

The Day-Cycle 1911-1929 is, again, clearly a Republican phase. The presence of Woodrow Wilson in this 18 year cycle is almost irrelevant. Wilson was elected by a fluke and then retained during a time of war – but the back half of the cycle was dominated by three Republican presidents, including the notorious Herbert Hoover, a mining engineer who had never been elected to any public office before becoming president of the United States. Hoover was an advocate of the ‘Efficiency Movement’, which argued that a technical solution existed for every social and economic problem.

Day-Cycle leaders are technicians by nature. They believe in technology, machinery, problem-solving through formulas.

Hoover was also a deeply-committed humanitarian, who was raised as a Quaker. During World War I, Hoover gave up his mining career and devoted his life to issues of food distribution in Europe, working 14 hours a day, crossing the North Sea 40 times to meet with German officials about distribution of food to hungry European war refugees. He also helped feed starving Russians, for which he was heavily criticized by Republicans, including Senator Henry Cabot Lodge, as ‘aiding the Bolshevik government’. To this he replied: ‘Twenty million people are starving! Whatever their politics, they shall be fed!’

When Hoover returned home, he was greeted with warm enthusiasm by Democratic politicians, including President Woodrow Wilson (Wilson referred to Hoover as ‘my successor’) and Franklin D. Roosevelt, rising star from New York. The Democrats wanted Hoover to join their team. Hoover considered it, felt the 1920’s to be a Republican decade, and didn’t want to join a ‘losing side’. The Great Depression turned Hoover into one of the greatest losers in American political history.

If the Day-Cycle 1911-1929 belonged to the Republicans, then the preceding Night-Cycle 1893-1911 had to belong to the Democrats. But is that possible? We must remember that a strange morphing of American political parties began in the 1860’s, when Abraham Lincoln’s Republican party started out looking more like today’s Democratic Party, especially in terms of civil rights, and the Democrats started splitting into conservative old-money aristocratic branches and angry agrarian working class fire-brand branches. It all gets quite confusing, in fact.

Was Teddy Roosevelt really a Republican; or was he a Democrat? We know he was a dedicated trust-buster, an enemy of corporate monopolies. We know that he was also a ‘cowboy’ president if ever there was one – a cowboy and an eager militarist, heart and soul. Teddy Roosevelt was a passionate man, with a hunger for making a better world. Roosevelt is not your normal Republican in today’s context surely. From Roosevelt’s speeches:

Probably the greatest harm done by vast wealth is the harm that we of moderate means do ourselves when we let the vices of envy and hatred enter deep into our own natures.
 But there is another harm; and it is evident that we should try to do away with that. The great corporations which we have grown to speak of rather loosely as trusts are the creatures of the State, and the State not only has the right to control them, but it is duty bound to control them wherever the need of such control is shown.

We wish to control big business so as to secure among other things good wages for the wage-workers and reasonable prices for the consumers. Wherever in any business the prosperity of the businessman is obtained by lowering the wages of his workmen and charging an excessive price to the consumers we wish to interfere and stop such practices. We will not submit to that kind of prosperity any more than we will submit to prosperity obtained by swindling investors or getting unfair advantages over business rivals.

Political parties exist to secure responsible government and to execute the will of the people. From these great tasks both of the old parties have turned aside. Instead of instruments to promote the general welfare they have become the tools of corrupt interests, which use them impartially to serve their selfish purposes. Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to dissolve the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day.

We stand equally against government by a plutocracy and government by a mob. There is something to be said for government by a great aristocracy which has furnished leaders to the nation in peace and war for generations; even a democrat like myself must admit this. But there is absolutely nothing to be said for government by a plutocracy, for government by men very powerful in certain lines and gifted with "the money touch," but with ideals which in their essence are merely those of so many glorified pawnbrokers.

There is no room in this country for hyphenated Americanism…. The one absolutely certain way of bringing this nation to ruin, of preventing all possibility of its continuing to be a nation at all, would be to permit it to become a tangle of squabbling nationalities.

A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. We have not the slightest sympathy with that socialistic idea which would try to put laziness, thriftlessness and inefficiency on a par with industry, thrift and efficiency; which would strive to break up not merely private property, but what is far more important, the home, the chief prop upon which our whole civilization stands. Such a theory, if ever adopted, would mean the ruin of the entire country--a ruin which would bear heaviest upon the weakest, upon those least able to shift for themselves. But proposals for legislation such as this herein advocated are directly opposed to this class of socialistic theories. Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal; but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows.

We must ever bear in mind that the great end in view is righteousness, justice as between man and man, nation and nation, the chance to lead our lives on a somewhat higher level, with a broader spirit of brotherly goodwill one for another. Peace is generally good in itself, but it is never the highest good unless it comes as the handmaid of righteousness; and it becomes a very evil thing if it serves merely as a mask for cowardice and sloth, or as an instrument to further the ends of despotism or anarchy. We despise and abhor the bully, the brawler, the oppressor, whether in private or public life, but we despise no less the coward and the voluptuary. No man is worth calling a man who will not fight rather than submit to infamy or see those that are dear to him suffer wrong. No nation deserves to exist if it permits itself to lose the stern and virile virtues; and this without regard to whether the loss is due to the growth of a heartless and all-absorbing commercialism, to prolonged indulgence in luxury and soft, effortless ease, or to the deification of a warped and twisted sentimentality.

Spoken like a true man of the Twilight, a man who sees both sides of the world, and chooses the middle path (the soul’s path) which is a very thin road between the two false extremes. He certainly does not sound like a modern-day Republican. Tax the rich; protect the poor from the corrupt corporations. Sounds like a modern-day Democrat.

William McKinley? In 1876, thirty-three striking miners at the Hanna Mines in Ohio were imprisoned for rioting after industrialist Mark Hanna brought in strikebreakers to replace striking workers. McKinley defended the miners in court, attained acquittals for all but one, and refused to take the miners’ money as legal fees.

Does this sound like the Republicans that we know?

What about Grover Cleveland, the Democrat? Cleveland was the only president to serve non-consecutive terms (1885-89 and 1893-97). He was the winner of the popular vote for president three times (1884, 1888, and 1892) – and he was the only Democrat elected for president in the era of Republican political domination (1860 – 1912). Cleveland, we’ll remember, was a Bourbon Democrat, supporting mercantile, railroad and banking interests. So the Democrats were more like today’s Republicans?

Noon 1893 – Grover Cleveland, Democrat, elected President

1897 – William McKinley, Republican, elected President

1901 – Theodore Roosevelt, Republican, elected President

Dusk 1902

1909 – William Howard Taft, Republican, elected President

Midnight 1911

1913 – Woodrow Wilson, Democrat, elected President

Dawn 1920

1921 – Warren G. Harding, Republican, elected President

1923 – Calvin Coolidge, Republican, President

Noon 1929 – Herbert Hoover, Republican, elected President

But then things get confusing. If the Night-Cycle (1893-1911) belonged to the modern-day Democrats (the old Lincoln Republicans), then the preceding Day-Cycle (1875–1893) should belong to the modern-day Republicans – and that is not the case. We have Republicans (Lincoln-Republicans) dominating the presidency from 1860 – 1912.

Midnight 1875

1877 – Rutherford B. Hayes, Republican, elected President

1881 – James Garfield, Republican, President - assassinated

1881 – Chester A. Arthur, Republican, President

Dawn 1884

1885 - Grover Cleveland, Democrat, elected President

1889 – Benjamin Harrison, Republican, elected President

1890 _ Sherman Anti-Trust Act

Noon 1893 – Grover Cleveland, Democrat, elected President

More and more I’m believing that ‘party affiliation’ means less and less. The time of ‘day’ (or ‘night’) molds the man, the leader, in the same way that water takes the shape of the container it fills.

What kind of Republican (current-day Democrat) was Rutherford B. Hayes as president? Here is a Republican living in Lincoln’s shadow who, in order to be elected, guaranteed southern Democrats the removal of federal troops from the defeated south and an end to reconstruction. In 1877, as president, Hayes used federal troops to control striking workers for the Baltimore and Ohio Railroads. Labor disputes degenerated into riots in several cities; and strikes spread across the country in support of the workers. Hayes sent in federal troops, who fired on the striking workers, killing more than 70 men. This action caused concern on both sides of the political spectrum: workers feared this signal a permanent anti-union posture for Washington – the Republicans in the 1800’s had been generally pro-union. Rich Industrialists feared an open revolt against the Ruling Class like the European revolutions of 1848.

Who was James A Garfield, really? His claim to fame as president was in attempting to heal factional schisms in his own party; and being assassinated by a disaffected seeker of an official post in Garfield’s government and defender of corrupt political patronage, Charles Guiteau. What was this factional rift between Republicans. The main rift between Republicans in the late 1800’s was between ‘Stalwarts’ and ‘Half-Breeds’: the ‘Stalwarts’ supported U.S. Grants’ run for a third term of presidency, opposing Rutherford B. Hayes who proposed major civil service reform. Since the Republicans had held power in Washington for so long, all government jobs went to Republicans. The ‘Stalwarts’ supported this cronyism; the ‘Half-Breeds’ desired to reform the so-called ‘Spoils System’.

James Garfield was a ‘Half-Breed’. As a part of the deal to get the nomination, Chester A. Arthur, a ‘Stalwart’, was chosen as Garfield’s vice-president. Guiteau, who called himself ‘the Stalwart of the Stalwarts’, in killing Garfield, passed the presidency on to his political ally, Chester A. Arthur.

Arthur, as president, to everyone’s surprise, broke ranks with his former ‘Stalwart’ cronies and joined the ‘Half-Breeds’ in push civil service reform, winning passage of the Pendleton Civil Service Reform Act and winning for himself the title “Father of the Civil Service’. He was clearly a man whose character rose with the authority of the office of the Presidency. Mark Twain wrote: ‘It would be hard, indeed, to better President Arthur’s administration.’

Arthur’s honesty and integrity as president apparently made enemies, even in Arthur’s own party – and he was not nominated for the party to run for re-election in 1884.

I am reminded of scientific experiments about which I read several years ago: scientists studied five groups of 20 children and observed the children in these groups and tested them for social skills, leadership and native intelligence. Each group self-divided into a hierarchy. Each group had a core of leaders, a large group of followers, a few shy isolationists, a few rebels. Next, these original groups were re-divided to create new groups. All the children showing above-average leadership skills were grouped together; those who appeared to be followers were grouped together; rebels and loners were grouped together. Remarkably, the new groups broke down into groups similar to the composition of the first groups. The new group with all ‘leaders’ demonstrated a few leaders, a large group of followers, some isolationists, and some rebels. The new group with all ‘rebels and loners’ divided into a hierarchy with a few leaders, a large group of followers, a few isolationists and a few rebels.

Individuals seemed to re-compose themselves to the new context in order to fill roles in some archetypal arrangement. A leader in one group became, quite easily, a follower in the next. An outlaw, in a group of outlaws, became the force of order and organization. Each human being has potentials and capacities which are uncovered by necessity, by opportunity, and by confrontation of voids that must be filled if harmony in nature is to be maintained or established.

There is nothing permanent in our natures and behaviors that is not influenced by context or Time. It is as if we are all made of water, water than takes different shapes to fill a reality with different containers that need to be filled.

The world of politics also works this way. Political parties are constantly shifting, filling, re-filling, re-shaping, splitting, coagulating, filling Time’s containers as Time requires, sometimes up, sometimes down, sometimes dark, sometimes light, flowing between poles, fulfilling necessities.

My earlier metaphor also works: the electron beam is composed of milliards of electrons, each free to follow its own path or arc provided that some other electron in the beam (which electron acts and which reacts can never be predicted) ‘balances’ the other, so that the nature or definition of the electron beam is never destroyed.

In human society, roles prescribed by Time’s laws are filled by particles in much the same way. If the two political parties do not balance one another to comply with the manifestation of Time’s Law, then the dominant party might grow factions in order to help achieve the balance, the Law.

Clearly we must look beyond the figure of the president to understand an age. Did Grover Alexander really define the culmination of the Day-Cycle (1875-1893)? Was Grover Alexander really a manifestation of the Sun-Hero? I think not.

However, there was a castration close to the Noon-Hour in this cycle. Remember that the act of castration can be legislation designed to impede the ‘masculine expansion’ of the circle of influence, affluence, and political and military power.

In 1890, the Sherman Anti-Trust Act was passed by the congress. This act was an attempt to excise the power of private corporations to monopolize an industry through restraining trade of competitors. The Act provided:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal…. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony….

This act required government attorneys and district courts to pursue and investigate trusts, companies, corporations and organizations suspected of violating the Act. (To some, the Sherman Anti-Trust Act was another word name for the ‘Get John D. Rockefeller Act’ – for Standard Oil soon became the target of government lawyers seeking punishment of illegal restraint of trade through complex, even fraudulent restructuring of a company’s organization.

What is a ‘trust’ anyway?

In 1879, C.T. Dodd, a lawyer for Standard Oil Company of Ohio, created a new type of ‘trust agreement’ in an effort to by-pass Ohio state laws against corporations owning stock in other corporations. The trust itself was not new. The trust had existed for several centuries as a form of legal contract wherein one party entrusted their property to a second party. The property was then used to benefit the first party. In a corporate trust, such as the one designed by Dodd, various corporations could assign their stock to a board of trustees. The trust then could issue trust certificates to the stockholders, who received financial compensation and benefits while operational control was maintained by the board of trustees. By consolidating control of most companies in any one industry under one controlling board of trustees, the industry was essentially monopolized.

Interestingly, Alan Greenspan, in his essay entitled ‘Antitrust’, attacked the Sherman Anti-Trust Act as damaging innovation, aiding weak competitors and, generally, harming society. Greenspan writes:

No one will ever know what new products, processes, machines, and cost-saving mergers failed to come into existence, killed by the Sherman Act before they were born. No one can ever compute the price that all of us have paid for that Act which, by inducing less effective use of capital, has kept our standard of living lower than would otherwise have been possible.

Corporate monsters that thrive on cannibalistic business practices can also lower the communal standard of living by forcing wages lower and by destroying local competition – look at Walmart today for instance. Monopolies hurt by the Sherman Anti-Trust Act were not fair-playing companies hamstrung by government regulation, unable to develop new technologies or innovative business practices by government interference, but law-breaking carnivores destroying competition by hook, by crook, and through government payoffs, so they could drive down costs (injure workers) and increase profits (soak the consumer).

Look around today. Look at the medical industry, where price-fixing is rampant, and competition is hamstrung by Congressmen who are owned by insurance companies, drug companies, and the AMA. Where is the Sherman Anti-Trust Act now, when we need it?

Are we surprised to see Alan Greenspan defending monopolistic corporate titans who make up the core of the American Ruling Class? Defending the giants and dismissing the ‘little man’, the insignificant ‘nickels and dimes’? No, we are not.

Are we surprised to see Alan Greenspan siding with the Standard Oil Companies of the world? No.

Is the ‘standard of living’ the only yardstick we use to measure the quality of our nation as a great civilization? Is the ‘bottom line’ in achieving our maximum potential as a civilization measured only by how many boats we have, how many snow-mobiles we own, how many houses, how much our portfolios are worth?

Do not store up for yourselves treasures on earth, where moth and rust destroy, where thieves break in an steal.

The government finally sued Standard Oil in 1909 under the Sherman Anti-Trust Act for ‘restraining interstate commerce by using the following illegal methods:

Rebates, preferences, and other discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines, and unfair practices against competing pipe lines; contracts with competitors in restraint of trade; unfair methods of competition, such as local price cutting at the points where necessary to suppress competition; [and] espionage of the business of competitors, the operation of bogus independent companies, and payment of rebates on oil, with the like intent….

The general result of the investigation has been to disclose the existence of numerous and flagrant discriminations by the railroads in behalf of the Standard Oil Company and its affiliated corporations. With comparatively few exceptions, mainly of other large concerns in California, the Standard has been the sole beneficiary of such discriminations. In almost every section of the country that company has been found to enjoy some unfair advantages over its competitors, and some of these discriminations affect enormous areas.

The government cited four illegal patterns of activity on the part of Standard Oil Company:

Almost everywhere the rates from the shipping points used exclusively, or almost exclusively, by the Standard are relatively lower than the rates from the shipping points of its competitors. Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Company, while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Company. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors

The evidence is, in fact, absolutely conclusive that the Standard Oil Company charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor, whose costs are ordinarily somewhat higher.

On May 15, 1911, the U.S. Supreme Court ruled against Standard Oil, declaring Standard Oil Group to be an ‘unreasonable’ monopoly under the Sherman Antitrust Act, and ordering Standard Oil broken up into 34 independent companies, each with different boards of directors.

‘Castration complex’ and ‘penis envy’. We leave Jung for a moment or two, and return to Jung’s alter ego Sigmund Freud (Freud is Day-Cycle prophet and Jung is the Night-Cycle prophet) to set our bearings again with regard to the destruction of the Day by the envious, angry knife-wielding Night.

Freud connected the ‘castration complex’ to early psycho-sexual development issues as the male child became aware of his primitive sexual desires as they came into conflict with the social norms, conventions and laws governing acceptable behavior. Lacan developed this concept further and defined it ‘the Law of the Father’.

‘Penis envy’ was the Freudian female counterpart to the male ‘castration anxiety complex’. Girls soon discover that boys have a position of advantage in society and link this advantage to the presence of an additional sexual advantage. (In fact, this is less Freud’s interpretation than my own.)

Thus begins a long, complex, often hostile relationship between complexes.

Boys do not, in fact, worry about fathers (and the Father’s Law) castrating them. Boys worry about their mothers castrating them. Social disciplining of boys is often done by mothers; and such behavioral correction carried out along gender lines carries with it castration overtones. Sons are attracted to their mothers along this same gender axis (as daughters are attracted to fathers). A mother correcting a son carries with in the implication of a sexual/emotional/love rejection, which is a form of castration. When a brutal father beats his son into submission, it is not a form of castration, it is a form of competition. The son is not being rejected by a threatened father, he is being suppressed: the father is recognizing his penis, and challenging it: the boy’s power is being recognized, and opposed. Only the female can castrate the male, through a rejection of the male’s power and, most importantly, the declaration that the male is not worthy to receive love.

Feminism is a very obvious manifestation of the ‘castration compulsion’ (and, of course, of the ‘penis envy’ mentality), which is a built-in time factor in human history. The woman wants her chance to drive the car. She resents the man’s power, his fame, his notoriety, his wealth-making magic…his excesses, his war-making compulsion, his corruption, his injustice. There are two sides to this, of course.

Women cutting their hair, dressing in business suits, focusing on careers, climbing the corporate ladder, rejecting the role of motherhood, honoring a sexually promiscuous lifestyle….everything is equal, except, of course, the presence of the penis. The only way to really make the genders equal, on the physical plane, is to drag man down from the sky. The only way to do this is to wound him, to castrate him, to make him docile and domestic.

The problem, of course, is that by doing this one eliminates the shadow side of the man – the violent, the overly-physical, the uncultured, the obsessively one-dimensional – but one also loses the positive side, the force of organization, the wealth-builder, the city-protector, the practical problem-solver. The country sinks into despair (depression is a ‘female’ disease), poverty, crime, fear…the Dark Ages. The Egyptian story of Osiris is one of the older examples of this mythology.

As Camille Paglia, as self-proclaimed feminist, pointed out in the 1990’s, if all the men of the world were sensitive academic female types (i.e., castrated men), who would fix her car when it broke down. Paglia stands out as a kind of voice of sanity during the rabid hyper castration phase that was the ‘death dance’ of feminism in this last passing of Darkness. Paglia broke ranks with orthodox feminism, rejected absolutist politically correct feminist ideology (there is a masculine ideology which is just absolutist and rigid in its extreme).

We remember that the Dawn/Spring (the Northern and Western Dawn/Spring) perspective, the Light (masculine) Principle overthrows the Darkness (feminine) Principle and escapes the underworld of darkness for the 18 years (the hemisphere) running from Dawn to Dusk.

Noon 1965 – Fall of the Patriarch (Castration). Growth of Feminist power.

Dusk 1973 – Darkness defeats light.

Midnight 1981 – Apex of Feminism, racial politics season. Rebirth of Masculine.

Dawn 1992 – Defeat of Feminist cycle; victory of Masculine Imperative.

Noon 2001 -

Dusk 2010

When we speak of the ‘castration factor’ in our Time-Cycle structure, we must remember that the Male Principle (expansion, Ego, rigid sense of self as ‘I’), at the end of its performance, is castrated by the Dark (Female) Principle. The Liberals (the female part) castrate Business through regulation, castrate the Military through budget restrictions, castigate Sports as macho tribalism that encourages aggression.

The Sherman Anti-Trust Act was an act of castration carried out by the Female Principle in American society against the Male Principle in American society.

Castration (which is a form of Patricide or Regicide or Fratricide) is, of course, always followed by darkness, the loss of energetic organization, infertility, social upheaval, financial chaos. The penis is the magic wand that carries the electrical charge that lights up the world, that raises a tent up into the sky inside of which people can live, soaring high into the atmosphere above the earth. When the tent’s central pole is collapsed, the tent falls back to earth; then the circus, the party, is over. Survivors on the earth hide in the caves as the world becomes dark.

We would expect Night Cycles of American History to show more and more consistent gains in rights of women and rights of non-white men. Also, we would expect Night-Cycles to demonstrate an increase in power of labor unions, and workers’ rights generally.

We have entered another Night-Cycle now. We expect the Democrats to dominate the political scene for some time in to the future; because of this we expect to see much more regulation of business, contraction of military spending, more legal prosecution of white collar business criminals, more emphasis on soul values, culture values (art, poetry, philosophy, music, humanistic values), and much more attention being given to the needs of workers, rather than, as today, to the pleasure of the superrich and the vanities of the superstars in sport, society-pages, and Hollywood.

Since the human rights of non-white races and women in the West is a very recent development, one intent on developing research along these lines (Night-Cycle progress, Day-Cycle regress) might focus on the cycles of class warfare, on the growth of plebian rights and the diminishment of patrician powers as they manifest in historical cycles.

Growing up in the 1960’s, most students in college felt that there was no need to study practical subjects at the university since there were no jobs waiting after graduation – so most people simply pursued true interests. This meant that study of humanities was dominant. I remember then also that membership in fraternities and sororities was passé – the classical, white, practical, materialistic values of the Day-Cycle were diminished to almost nothing. They came back with a vengeance during the Reagan Era onward. But they will once again be seen as a form of political unconsciousness in the next cycle.

As this depression deepens and broadens, the initial panic we see now of students rejecting a humanities education for a practical vocational training education, to compete for diminishing jobs, will be lessened. The cost of a university education will be reduced. Loans will be made available to finance education. Students will again pursue soul interests, instead of just body interests, as has been the major focus since the last bottom in 1983.

A real, a deep, society needs to respect both the Father and the Mother, needs to produce the fruits of both the Day (material processes) and the Night (intellectual/spiritual/cultural processes). A great society produces epics and monuments to both the Day and the Night, seeks physical and material advantage for its own tribe, but also seeks dreams and visions for all the peoples of the world. Shakespeare and Tolstoy and Pushkin and Melville and Dante and Goethe and Yeats and Joyce and Faulkner all gave gifts to the entire world, regardless of tribe or race: each generated photographs of the soul; maps through the darkness, back to God, through the labyrinth of loss and fear and desolation.

In the Egyptian myth, Osiris, the Day-Cycle, is dismembered by the Dark Principle, this dark brother Set. Set originally, with his 72 fellow conspirators – there is that number again, 72 (4 x 18 = 72) – tricks Set into a coffin-like chest which has been made to fit only him, which coffin is then sealed and set afloat in the Nile River. Osiris drowns in the coffin.

Upon the death of Osiris, Egypt falls into darkness, death, poverty and chaos. Isis, the sister and wife of Osiris, seeks to find his body, thinking a proper burial might help alleviate the misery of her country. Set, on a hunting trip, recovers the coffin with the god Osiris inside: he dismembers the body of the Sun God, cutting him in 14 pieces (7 steps up, 7 steps down?), and scatters the 14 pieces across Egypt. Isis finds 13 of these pieces, mummifies the remains, and seeks to build a replica of Osiris as a sacred talisman to try to restore order to her kingdom. She cannot find the phallus, however, which has been thrown into the sea and has been eaten by a fish (a whale?).

Isis understands that she cannot lift the gloom that has fallen over Egypt without the missing magic wand of Osiris. She wanders in darkness throughout Egypt seeking the missing phallus, accompanied by 7 scorpions (this is a time-reference to the zodiacal sign Scorpio, the first Underworld stop in the dark half of the circle of life) that protect her. The tears of Isis, mourning her lost husband, overflowed the Nile and brought the Great Flood to Egypt. When Isis realized she would never recover Osiris’ lost penis, she fashioned a token penis out of gold, sang a love song to her mummified husband, arousing him momentarily, at which time the lovers united and Isis conceived Horus, the New Sun Hero,. Horus, after growing slowly in secret obscurity, eventually came to power, avenged the murder of his father by killing his own deceptive uncle, Set, thereafter bringing light, the Day-Cycle, and fertility, back to Egypt.

Another note about Set’s 72 fellow conspirators: legend recorded that 1/72 of the Moon’s light was supposedly won by the Great God Thoth (Hermes/Mercury) for the birth of the five major gods of Egypt: Set, Nepthys, Osiris, Isis and Horus. Divide the 360° year by 72 and you get 5. These 5 days are added to the old Egyptian calendar of 360 days per year to get the 365 days of the new Egyptian calendar. The extra 5 days are essentially days of the gods, each of whom gets a day of their own.

In an admittedly very modern interpretation of the Set/Osiris/Isis myth, the killing and dismemberment of the Light Brother by the Dark Brother presents an image of civil war. The myth describes a civil war in Egypt, one in which the Principle of Material Light is murdered by Darkness. This pretty much describes America before the advent of Abraham Lincoln.

As we have written, the titans of Business, Ego-Development, and Military Expansion (the Masculine image of straightforward literalism and the ‘development’ of civilization) should dominate from every Midnight to every Noon period. This corresponds to the New Moon to the Full Moon phase. In Asia, the belief is that it is a good omen when girl babies are born at the Full Moon and when boy babies are born at the New Moon. This is a carry-over of the belief that the New Moon to Full Moon cycle is masculine, and the Full Moon to New Moon cycle is feminine.

While this may seem like a dubious description for the Day-Cycle from 1875 - 1893, it looks more reasonable as a description of the Day-Cycle from 1839 -1857, just preparatory to the American Civil War.

Midnight 1839

1841 – William Henry Harrison, Whig, elected President

1841 – John Tyler, Whig, President

1845 – James K. Polk, Democrat, elected President

1846 – Mexican-American War

Dawn 1848

1849 – Zachary Taylor, Whig, elected President

1850 – Millard Fillmore, Whig, President

1853 – Franklin Pierce, Democrat, elected President

Noon 1857 – James Buchanan, Democrat, elected President

1861 – Abraham Lincoln, Republican, elected President

1861 – American Civil War

1865 – Andrew Johnson, Democrat, President

Dusk 1866

1869 – Ulysses Grant, Republican, elected President

Midnight 1875

1877 – Rutherford B. Hayes, Republican, elected President

1881 – James Garfield, Republican, President

1881 – Chester A. Arthur, Republican, President

Dawn 1884

1885 - Grover Cleveland, Democrat, elected President

1889 – Benjamin Harrison, Republican, elected President

Noon 1893 – Grover Cleveland, Democrat, elected President

We remember that the Whig Party in America was largely an anti-Andy Jackson party. Jackson was the populist Democrat who essentially cancelled the National Bank, polarized America in a class war between rich and working poor, Eastern urban and rural Americans. Jackson was a disciple of Thomas Jefferson, supporting Jefferson’s ideal of a ‘agricultural republic’. Jackson opposed the (Second) National Bank for many reasons that Jefferson opposed the (first) National Bank: too much national financial strength concentrated in one institution; exposed the country to control by foreign interests; main result was to make the rich richer; through implicit corruption, had too much influence over Congress; gave political precedence to northeast states over rest of nation. The Second National Bank had been authorized during James Madison’s presidency (1816) for a 20 year tenure. Jackson, as president, worked to rescind the Bank’s charter. To Jackson (and to Jefferson before him), the National Bank benefited an ‘elite circle’ of industrial and business ‘entrepreneurs’ at the expense of farmers and working poor.

The Whig Party was formed of anti-Jackson National Republicans and surviving Federalists, as well as some anti-Masons. Whigs viewed Jackson as a romantic anti-Modern, an idealist who favored class warfare. (The Day-Cycle favors polarization on the basis of race; the Night-Cycle favors polarization on the basis of class.) Jackson was described as a ‘reactionary’ opposed to the forces of social, economic and moral modernization. In fact, Jackson’s opposition to economic modernization was most responsible.

Whigs had argued earlier (in the form of Federalists) that the president should be a kind of king, with a full set of centralized powers. When Jackson’s power as president became threatening to the commercial power centers of the northeast – ‘King Andrew’ they called Jackson in derision – they began to argue that real constitutional federal authority should lie with Congress instead of with the presidency. Ideals are often less permanent than the needs of self-interest.

Remember, the Day-Cycle is ruled by the Hero, who protects the civilization from chaos, and protects the rich from the poor’s manifest revolutionary disorder. The Day-Cycle separates classes into a hierarchy, high to low. The Night-Cycle is ruled by the anti-hero, who protects the poor and despises the corrupt rich who run the civilization (run the civilization mostly for the benefit of themselves). The Night-Cycle resolves the hierarchy back toward the center, pulling the high down, and raising the low up, in a very Biblical perspective.

Chaos is the Biblical description of all elements reduced to the same plain or central container, a primordial soup, a primeval ocean, from which the forces of Creation evolve.

In the imagery of modern physics, the expanding universe reaches its maximum perimeter of expansion, then experiences what modern science describes as a ‘Big Crunch’ (a kind of ‘credit crunch’, in fact) -- the ‘Big Crunch’ being the in-breathing of the Universe, the opposite of the ‘Big Bang’, the out-breathing of the Universe. After this ‘Big Crunch’, the universe and begins contracting, falling back in on itself. All the matter in our universe then contracts to absolute density, the size of a point –- all matter resolves back to a super-dense state, a chaos point, an unimaginably massive black hole.

Is this really what happens? Scientists agree that if there is enough matter in the universe gravitational forces will stop its expansion. When that happens, gravity will cause the universe to reverse its direction and begin to collapse under its own weight. There is no better description of what happened financially under the guidance of Greenspan/Bernanke than this scientific metaphor.

This process goes on forever (a very long time, at least), over and over again, Day-Cycle (expansion) followed by Night-Cycle (contraction). Out of Black-Hole Chaos when the breathing creates bubbles of matter; back to the Black-Hole Chaos when the material bubbles collapse and depress.

The Whig cycle Ego Expansion (White Light Expansion – the Whigs were also known as ‘White Heads’) from 1839-1857 contains many ear-marks of what adversaries call Fascist Imperialism. Whigs appealed most to professional and business classes: bankers, doctors, lawyers, merchants, shop-keepers, industrialists, large plantation owners: the moneyed classes. Whigs did best in elections in manufacturing centers and commercial cities. Protestant religious revivals attempted to whip up a high-minded religious commercial morality linked with Whig principles.

This we would also see later in the rise of a new commercial Protestantism when Ronald Reagan led the modern-day Whigs back to power in 1983.

The excesses of Andrew Jackson are, in many ways, reminiscent of the excesses of the democrats in the 1960’s and 70’s. Good intentions often pave the Road to Hell.

Jackson’s nullification of the Second National Bank was not a panacea for the economy. Instead of a National Bank lending money, countless state and local banks took up lending. As lending grew (paper promised not backed by gold), inflation exploded; and state debt soared. Jackson then issued the ‘Specie Circular’ in 1836, requiring all buyers of government-owned lands must pay for the land in gold or silver. But the banks did not have enough supply of precious metals to exchange for their notes. The banks collapsed. The Panic of 1837 was on. Economic depression resulted, which lasted for many years.

Of course, the Night-Cycle is defined by spiritual/economic depression and social chaos, so this is not surprising.

There was another nullification battle during Jackson’s presidency (also called the ‘secession crisis’ of 1828-1832). National secessions (divorces) are part of the Night-Cycle: 1828-1832; 1857-1875; and 1965-1983 all have shown manifest evidence of the entropic energy to disorganize, to pull away from the center.

Noon 1821

1825 – John Quincy Adams, Democratic-Republican, elected President

1829 – Andrew Jackson, Democrat, elected President

Dusk 1830 – First Secession Crisis (Nullification Crisis)

1837 – Martin Van Buren, Democrat, elected President

Midnight 1839 ….

Noon 1857 – James Buchanan, Democrat, elected President

1861 – Abraham Lincoln, Republican, elected President

1861 – Second Secession Crisis (American Civil War)

1865 – Andrew Johnson, Democrat, President

Dusk 1866

1869 – Ulysses Grant, Republican, elected President

Midnight 1875…

Noon 1965

1969 – Richard Nixon, Republican, elected President

Dusk 1974 – Gerald Ford, Republican, President

1975 – Publication of Ecotopia published, author Ernest Callenbach

1977 – Jimmy Carter, Democrat, elected President

1981 – Ronald Reagan, Republican, elected President

1981 – Ecotopia Emerging published, author Ernest Callenbach

1981 – The Nine Nations of North America published, author Joel Garreau

Midnight 1983

One might snicker at the suggested ‘third secessionist crisis’ I have listed – but we must remember that the Spirit of Chaos (the energy for self-destruction) reached fever pitch during the civil-rights/Vietnam War rebellion – and we are heading into another manifestation of this energy today.

As I see it, there are two main paths into the American future, one – the current Republican path – which sees America as the ‘rightful’ heir to the historical inheritance of the Roman Empire, with a slight twist, a religious covenant with Israel and a God-given command to dominate the world, to defeat an incipient Islamic rising, the implications of this being more economic and military dominance of the world, and a military march down the same path Rome took 2,000 years ago. I do not speak of this vision with disrespect. I see the historical logic of this march – and I am not sure it can be avoided, in fact. This seems to be the ‘electron beam’ path that his being lighted into the future. While we may have the freedom, as individual electrons, to oppose or to ignore the trajectory of this beam, we may not be able to avoid this reality.

A second path will be the Night-Cycle path, which will call on America to withdraw from the world, to exercise that old historical root-based isolationist spirit, to return home, to break apart as an ‘immoral empire’, to fractionate into ‘European’ nations and ‘self-castrate’ for the good of the world. The novel Ecotopia, written by Ernest Callenbach portrays a secessionist ecologically-correct independent country in a declining America, Washington-Oregon-Northern California that shows the rest of the world how to live correctly. Callenbach followed this hugely successful novel (successful with the counter-culture), with a sequal (funny how that works) Ecotopia Emerging in 1981. That same year Joel Garreau took Ecotopia as a seed pod to develop, publishing The Nine Nations of North America, which portrays a defunct America reconfigured into a European-style dismembered empire into 9 separate, geographically-delimited nations, each developing unique cultures, languages, and histories.

These are the two visions that will be fighting for dominance. More of the same from the Republicans, a military march into the future, with new technology, new economies, new wars to be won; and less of the same from the Democrats, a turning within, a fortress mentality, a rejection of the objective world.

Day-Cycles dismiss subjective realities as being fantasies, forms of madness. Only the ‘real world’ matters, which means money, status, family, death. Night-Cycles inevitably de-value objective realities as the culture essentially goes to sleep. It’s not that one view is good and the other view is bad. One view, carried on the out-breath of deity’s bubble-making travels at high speed in to the objective world, the future; the other view, carried in the in-breath of deity’s matter-contraction travels at reduced speed back in to the subject world, back in to the Black Hole of destruction-creation, the source from which all life and matter comes and to which it returns.

The middle path is always best (Plato said that I believe). The objective world is real. Money does matter; we do need to protect ourselves from adversaries that are forming on the horizon; technology does help to free us (slavery ended because of technology not simply because of well-meaning politicians and humanists drafting high-sounding logics about God’s intentions for humanity – without technology we would slip back in to slavery, barbarism, and an even more unequal social structure). But the subjective world is also real. The Night World is just as real as the Day World. The logic and language of the Night World is just as real and as important, as vital in fact, as is the Day World logic and language. A culture that wishes to attain immortality (i.e, to live a long life) must learn the language of both worlds, and apply each language as it is needed, to described and master the realities of each opposite landscape, an expanding positive landscape on one hand, and a contracting negative landscape on the other.

I will write more about the middle path between the two competition visions of Empire and Dismemberment later in this book.

As I have also written, political parties are not static. When I speak of Republican vision being for expansion of the empire, this is a half-truth. Republicans are historically isolationist and conservative. Republicans are not historically careless with money and proponents of excess lending and credit.

The party in power always has a desire born in self-interest to expand welfare and material benefits for its citizens. The Democrats, when in power, manifest masculine military expansiveness also.

Each party gets its new identity, in pieces of course, from the party that it opposes. If the right hand is raised by the Democrats, the left hand is raised by the Republicans. If the Democrats throw trillions of dollars into the Black Hole of the Depression, the Republicans develop a straight-faced position of ‘fiscal responsibility’. However, if the Republicans were in power, needing to fix the crisis they created, they would probably being standing in line volunteering to throw the money into the vacuum, as did George Bush, the great Nosferatu Paulson, and other ‘leaders’ across the aisle.

So, Jackson’s economy was in the shambles. The ‘first nullification crisis’ came about because of so-called protectionism. Jackson supported high tariffs on manufactured goods shipped to America from England. These tariffs helped northeast manufacturing states undercut English prices and sell their goods throughout America. But what’s good for Tit is also good for Tat. High foreign tariffs on American goods made southern agricultural products less competition in Europe.

There was already intense regional tensions connected with the issue of slavery. The North was a manufacturing economy; so, the North did not need slaves. In fact, the North paid ‘free’ workers in factories and mills almost nothing to produce finished products (and killed union organizers who sought higher wages) – so the Northern industrial titans had the best of both worlds at the time: cheap labor; and a cleaner moral image vis-à-vis plantation owners in the South who made no pretense of their Day-Cycle greed and lack of conscience.

The South now also had the tariff issue to add resentment. In 1828, South Carolina argued that any state had the right to ‘nullify’ any federal act (such as the creation of tariffs – the ‘Tariff of Abomination’) or law that produced unfair hardship for any state in the union. Jackson’s vice-president, John C. Calhoun, sided with his home state of South Carolina. At the ‘Jefferson Day dinner in 1830, Jackson toasted Calhoun with “Our federal union. It must be preserved! Calhoun countered with his toast: ‘The Union: Next to our liberty, the most dear.’

Once again, ‘states rights’ was used a a lynchpin ideology of deconstructionists. This ideology would be used by Republicans and Democrats both throughout the history of America. Democrats don’t trust the imperial presidency when they are out of power; Republicans distrust ‘Big Government’ when they are out of power. Ideologies get recycled, massaged, re-configured, re-cast, re-interpreted, and given a new face. Time changes everything. Time changes also all politically ideologies.

Jimmy Carter and Bill Clinton were elected by running ‘against Washington’. And so was Ronald Reagan.

Within a year Jackson and Calhoun had broken politically.

When South Carolina insisted on its nullification claim, Jackson vowed to send federal troops to the state to enforce the federal law. In 1832, Jackson issued a proclamation against all and potential nullifying states: ‘The power to annul a law of the United States, assumed by one State, [is] incompatible with the existence of the union, contradicted expressly by the letter of the Constitution, unauthorized by its spirit, inconsistent with every principle on which it was founded, and destructive of the great object for which it was formed… [South Carolina] stood on the brink of insurrection and treason…. The Constitution…forms a government not a league. To say that any State may, at pleasure, secede from the Union is to say the United States is not a nation…’

Jackson asked Congress to pass a ‘force bill’ authorizing the use of federal troops to enforce the tariff. It was a presentiment of things to come. Calhoun worked a compromise (reduced) tariff, which neutralized the crisis.

In January 1835, after attending the congressional funeral of South Carolina representative Warren R. Davis, Jackson was attacked by an unemployed house painter from England, Richard Lawrence. Lawrence stepped out from hiding behind an architectural column, raised a gun at Jackson, and fired. The gun misfired. Lawrence pulled out a second gun; but the second gun also misfired.

When interviewed, Lawrence blamed Jackson for his lost job (Jackson’s struggle with the Second National Bank); finally, after further questioning, Lawrence admitted that he, Lawrence, was actually the deposed English King, Richard III, and that Jackson was merely his clerk.

After a long stretch of Democratic rule, the Whigs (the ‘White Heads’) finally came to power in 1841, with the election of William Henry Harrison. But Whig presidents couldn’t keep from dying while in office.

Midnight 1839

1841 – William Henry Harrison, Whig, elected President

1841 – John Tyler, Whig, President

1845 – James K. Polk, Democrat, elected President

Dawn 1848

1849 – Zachary Taylor, Whig, elected President

1850 – Millard Fillmore, Whig, President

1853 – Franklin Pierce, Democrat, elected President

Noon 1857 – James Buchanan, Democrat, elected President

Harrison was elected largely because of voter dissatisfaction with the chaotic dynasty of Jacksonian Democrat rule, with its economic collapse. Harrison defeated Jackson’s hand-picked successor, Martin Van Buren, to whom the Whigs referred as ‘Martin Van Ruin’. Another reason Harrison won the election was his pledge to serve only one term if elected. The issue of a constitutional term-limit was valued by voters, many of whom felt Andrew Jackson had held too much power for too long in Washington. Harrison kept his promise by dying only 31 days into his presidency. John Tyler, the Whig Vice President, replaced Harrison in office.

Then, in 1849, Zachary Taylor was elected as the next Whig president. But he also died in office. Millard Fillmore, his Vice-Present, succeeded Taylor as the president.

In 1844, the Democrats, led by James K. Polk, supported westward expansion and free trade; the Whigs (led by Henry Clay) supported protectionism through national tariffs and opposed annexation of Texas. Not exactly what one might expect, when viewing the 19^th Century through the filter of 20^th Century political party ideals. Demonstrating an amazing capacity for political survival, however, Whigs in 1848 abandoned their criticism of the Texas war issue and nominated Zachary Taylor, Mexican-American War hero, as their candidate for the presidency. Taylor was elected.

The Whig glory didn’t last long. The Compromise of 1850, an attempt to neutralize and balance the slave question by piece-mealing new land acquisitions (Texas, New Mexico, Caifornia, etc.) into designated ‘free state’ or ‘slave state’ categories -- an attempt to avoid stepping on toes – became the death of the Whig Party. The Whigs largely split in two, northern Whigs being against slavery, southern Whigs supporting slavery.

In 1854, the Kansas-Nebraska Act allowed citizens of Kansas and Nebraska territories to vote to determine their own laws with regard to slavery – that is, whether they would be a ‘free’ or a ‘slave’ state. Northern Whigs viewed this development as a sell-out to southern slave interests – they insisted that slavery be stopped in its tracks. Most northern Whigs bolted from the Whig party – Abraham Lincoln changed his affiliation that same year – joining the new anti-slavery Republican Party. Some northern Whigs joined the ‘Know-Nothing Party’, which delighted in crusades against Irish and German immigrants. The Whig party in the south simply vanished, being absorbed mostly by the pro-slavery Democrats as the national sank into civil war.

Because of the complexity of the organic metamorphosis of political parties, it isn’t possible to link current political ideologies (Republicans and Democrats) backward in time as guiding symbolic signposts of historical time-telling. In other words, I don’t feel I can prove that current-day Democrats are not always in power during the deflationary negative-energy trip down the mountain into the sea of dreams. Likewise, I cannot prove that current-day Republicans are always in power during incarnation of the Egoic positive-electricity expansion phase. This may be true – and seems to be true using only Twentieth Century data – but I don’t feel I can prove this.

I have stated that wars should come at or near the twilight times of the Day or the Year, depending upon the scale you are using. The Light-Darkness is perfectly balanced (at equal strength, and ready to fight) at Dawn (Spring) and Dusk (Autumn). The suggestion is that a war in the Midnight-Dawn range precedes a climb into egoic light; and a war that occurs in the Noon-Dusk period presages a decline in power and a descent into chaos. The Noon-Dusk war should involve a great deal of civil discord, or even be a full-fledged civil war. The Dawn Wars should display more unified national harmony and shared vision.

Spring and Autumn are the ‘times’ in Nature when the most violent storms appear. Tornado season in America is March – June. Hurricane season in America is July – October.

Is this premise proven by historical data? Somewhat, perhaps; but not absolutely.

The American War of Independence was a Dawn War. The War of 1812 was a Dawn War. The Mexican-American War was a Dawn War. The American Civil War was a Noon-Dusk war. The Spanish-American War does not really fit the picture, it being a Noon-Dusk war (closer to Noon). It was almost not a war – more like a skirmish – ending in four months. The aim was to wrest foreign territories away from Spain (Cuba, the Philippines, Guam, and Puerto Rica) for incorporation in to the expanding American Empire. It does not really happen when we would expect it to.

World War I was a Dawn War. World War II was a Dusk War (which defies our reasoning). The Korean and Vietnamese Wars were both Dawn Wars (although, when did the American-Vietnam War actually begin? This answer is somewhat elusive.) The Persian Gulf War was a Dawn War and the Iraq and Afghanistan Wars were Noon-Dusk Wars.

Not every nation is synched to America’s 18 year/36 year cycle. My intuition is that every nation has its own 18/36 year cycles, like gears turning in a very large clock, each running from and toward different cardinal points on the clock. One nation’s dusk or dawn is not every nation’s dusk or dawn. Germany’s ‘Dusk’ may have occurred in 1939 – I don’t know. I have not studied German history using this concept as a microscope.

Can we predict wars using this pictorial system? I don’t know. My intuition tells me that the next great world war may have already begun, and that we are in the shallow edge of the water moving out toward the deep. But the truth of this remains to be seen.

1775 – American War of Independence against Great Britain

Dawn 1776

Noon 1785

Dusk 1794

Midnight 1803

Dawn 1812 – War of 1812, against Great Britain

Noon 1821

Dusk 1830

Midnight 1839

1846 – Mexican-American War

Dawn 1848

Noon 1857

1861 – American Civil War

Dusk 1866

Midnight 1875

Dawn 1884

Noon 1893

1896 – Spanish-American War

Dusk 1902

Midnight 1911

1917 – World War I

Dawn 1920

Noon 1929

Dusk 1938

1941 – World War II

Midnight 1947

1950 – Korean War

Dawn 1956

1959 - Vietnam War

Noon 1965

Dusk 1974

Midnight 1983

1991 – Persian Gulf War

Dawn 1992

Noon 2001- Afghanistan War

2003 – Iraq War

This method of describing the processes of history is a bit like trying to describe a chessmatch by predicting which pieces will land on which squares at what time (the squares are black and white also). We understand fairly clearly what the pieces represent, what directions the different pieces move, what the board looks like (the board as a kind of timepiece). We also understand that the true reality is not the player-figurines in the game, on the surface of the board, but the two players playing the game, the two principles behind the scenes: Day and Night, Dionysus and Apollo, Cowboy and Indian, Reagan and Carter, Hamilton and Jefferson, Castor and Pollux, Cain and Abel, Christian and Muslim, Tom Sawyer and Huck Finn, Lincoln and Jefferson Davis, Nixon and Kennedy…..Sun and Moon. Man and Woman.

At Noon we have the King; and at Midnight we have the Queen. We have the pawns who almost never appear in the telling of history, except in strange situations, such as Lee Harvey Oswald (who apparently was a pawn or patsy in real life – and not the first or last), or as the millions of peasants and working poor who fight and die and are mutilated and crippled in wars to keep the Kings and their Bishops and their Bankers in power. The Rooks are the Knights, the Aristocrats, who lead the peasants into battle for the King and his Bishops and his Bankers and who become, with the King, and the Church (the Bishops/Bankers) the Ruling Class of the Society.

These are the Day-Cycle symbolic manifestations of the Ego in advancement. More modern versions of these roles include the artist (architect), the engineer, the banker, the scientist, the mathematician, the entrepreneur (that magician who makes money appear from nothing but hot air, ‘concepts’, and other people’s money), the soldier, the lawyer, the husband, the pope, the minister or the prime minister, the president (as a form of king). Clearly, the Ego-Expansion side of the board is being played by the White Pieces.

Marsilio Ficino, medieval Italian philosopher, writes of four ‘personalities’ (personas) who play for the Dark Team and can save the Ego-centered man from destruction through the loss of his soul. Ficino’s four ‘chess pieces’ are based, at least partially, on Plato’s notion of the ‘Four Frenzies’ – masks assumed by Dionysus, or embodiments of Orpheus as he descended into the Underworld of Death. Ficino’s four personas of the decline are (1) poet; (2) priest; (3) prophet; (4) lover. These four roles – inducing a kind of ‘necessary madness’, and working sequentially -- frees the personality from the arid death the Ego inflicts upon the Soul through its insistence on shadow-free rationality, on literalness, on viewing and measuring reality from the outside only.

An old Sufi tales tells of the man who lost his glasses at night and is searching under a street-lamp for his lost glasses. Another man comes along and asks what he is doing. The man explains that he is looking for his glasses. ‘Did you lose them here?’ the man asks. ‘No,’ the first man answers. ‘I lost them over there somewhere, where it is dark. But it’s so bright over here – so I’m looking here in the light.’

In many ways this describes the enlightened, rational, scientific method. One cannot find what has been lost (the lost glasses, or the soul, for instance) when one insists on looking where this lost quality is not to be found (simply because it’s easier to see where the light is).

We remember that the Romantic Man (Dusk/Autumn) idealizes the Past, much as the Renaissance Man (Dawn/Spring) idealizes the Future. Why is this so? The Renaissance Man moves out of Past (which is becoming increasingly dark) into the Future; for him the light is shining on the Future. The Romantic Man moves out of the Future (the vision of the Future – which is becoming increasingly dark for him) into the Past; for him the light is shining on the Past, on a Golden Age in his memory. Disillusionment with life (the Future) forces a man to reflect, to look back on his life, seeking truths.

When a man thinks he is going to be rich and successful, he throws all his heart in to the energy of ego expansion. When the man realizes this has been an illusion, for whatever reason, the illusory bubble collapses; and the man is forced back on the resources of his past. This reflection begins in the contemplation of one’s personal past – but reflection also can lead back past the personal past, back into the collective consciousness, or intot he Mind of the Universe – impersonal memories of the universal archetype.

It is interesting to note that the Romantic Man idealizes the Past – and the Poet and Priest often idealize the past – but the Prophet and the Lover display an awakened ardor for the Future, the Prophet seeking to ‘predict’ it, and the Lover seeking to make a place within it for himself and his beloved. Somehow, in these latter two figures, we see the soul ‘rounding’ out of the darkness of the Past and again seeking the light of forms, body and the Sun in the Future.

Thomas Moore, in his book on Ficino’s philosophy, The Planets Within, writes:

The feeling of nostalgia might even appear in memories of past episodes, of a Golden Age in the personal past. The past often serves as a metaphor for authenticity, whether it is the personal past or cultural history. We think back sometimes in order to feel deeply and to recover something which seems to be lost. A tone of melancholy sometimes colors cherished memories, a feeling-tone Freud defined as a ‘sense of loss’.

What is lost, its absence felt in these moments of nostalgia, is the soul itself, a state of being animated and spirited, filled with anima (soul) and spirit. The soul is asleep and needs to be awakened. But the soul’s sleep is supported not only by materialism but also by a commitment to ideals of sanity and stability. It is not only the fluff of materialism that soothes the psychological unconscious, the steady, monotonous hum of the sane, adjusted life gives it support as well.

It follows, then, that the awakening of the soul may entail some kind of insanity and instability…. Ficiono’s theory is built upon Plato’s ‘four frenzies’, and idea discussed and expounded throughout the Platonic tradition… The interesting point in this theory of ‘mania’ is the suggestion that, in order to transcend Ego concerns and materialistic unconsciousness, we require inner figures associated with specific kinds of nonrational consciousness. These are: poet, priest, prophet and lover.

Each of these figures personifies a mode of consciousness sufficiently different from ordinary ego-awareness as to seem mad. Yet, we need these figures constellated within our consciousness; they provide necessary madness. As I have said: this madness is not the same as psychosis… Ego is not coterminous with the soul. Some states of consciousness transcend ego-awareness , and, for that reason, they are beneficial to the soul… In Platonic madness, the soul is free of body and ego and may be quite creative in that state. As Ficino writes: ‘Many poets compose in madness and, afterwards, do not know what they have said, as if God had used them as musical instruments’…

This ‘Platonic madness’ is a lunar perception, a response to an environmental darkness that limits the perceptive powers of the eyes (physical vision – linked to rational modes of thinking) and emphasizes the perceptive powers of non-visual senses (with ‘hearing’ as primary). The poet, the priest, and the prophet…listens to God. The lover listens to his heart.

‘Real’ religion comes in the Night-Cycle. The Night-Cycle draws the defeated soul back toward God, on his knees, having been humbled. The Inflated Ego is the winner. The Deflated-Ego is the loser. The Deflated-Ego is spiritually impoverished, abandoned by almost everyone, and sinks into the depths of sorrow, loss, fear, abandonment, poverty, terror…this is a kind of purification that prepares the soul to meet God again.

‘Real’ religion comes to a nation when its citizens are on their collective knees. This is the reason that ‘darkness’ is built-in to the system. ‘Real’ religion springs from the soul’s confrontation with Death and re-discovery of God’s majesty. ‘Real’ religion is not literal. ‘Real’ religion goes much deeper than rigid moralism. Moralism is part of religion…but it is the surface of ‘real’ religion. ‘Real’ religion involves the individual soul becoming a timeless biblical persona who faces the ‘living God’ and discovers him own soul (Universal Soul) – and in this soul his own God-like principle.

The Day-Cycle begins with its roots in ‘real’ religion but ossifies into rigid formalism, life wrung out of the body, replaced by a rigid code governing behavior and a fixed concrete polarity founded upon racial and/or national exceptionalism.

‘Real’ religion is founded in humility. Humility allows for atonement between the Father (the Day-Cycle) and the Son (the Night-Cycle). And Atonement between the Father and the Son is the moment of spiritual rebirth.

The Son assuming the roles of poet, priest, prophet and lover allows for the Son to descend deeper and deeper into the Night-Element of Soul (Water) and to be re-introduced to the ‘living’ God, the Mystery God, ‘Wisdom’, the God living on the High Mountain in the desert in the Darkness.

Of course, the ‘divine madness’ of Dionysus in his Night-Cycle (religious frenzy) can be compared with the Day-Cycle madness of Ahab (or Allen Greenspan, in this instance), or Adolph Hitler’s Germany, or the American ‘banking’ sector that decided that ‘filthy rich’ was not rich enough, and torpedoed the world’s economic welfare out of insatiable lust for more money and more power. The Day-Cycle madness is a more conventional form of madness apparently – as such, it is a more acceptable psychosis to the masses. Nearly everyone can find a place in themselves that is compatible with the egoic fantasy of dominating the world like the King-Son dominates life on the Earth, like the Donald Trumps, the Hank Paulsons, the Bernie Madoffs dominate the ‘real’ world of daylight.

Midnight Madness and High-Noon Madness are both dangerous to one’s health; both represent ‘man out of balance’, one entranced by the seductive powers of the subjective, the other transfixed by the megalomaniac powers of the objective. Both offer the soul a kind of godhood, one in the realm of anti-matter (spiritual omniscience and omnipotence – remember Jim Jones), the other in the realm of anti-spirit (material omniscience and military omnipotence).

Would one choose to live in the Day-Madness of Hitler and Pinochet and Hirohito or in the Night-Madness of Pol Pot and Mao Tse Tung and Stalin? This is not a very attractive choice, clearly. Having a political mechanism for ‘castration’ of the Masculine Day-Force and a ‘religious elevation’ mechanism for the Female Night-Force – an ‘assumption of Jesus into heaven’ and atonement with the Father -- helps us to escape a political fixed-idée and fixed fatality at either of the lamentable extremes of Day or Night and to achieve ‘immortality’, which is the design of the ‘spiritual quest’ – the magic elixir of life written about with such reverence by the philosopher/alchemists from the European Middle Ages.

Magnetism does wonders for us when we have lost our way with either too much Sunlight or Day-Power (Ego Intoxication) or too little Sunlight or Night-Power (Anti-Ego intoxication) by drawing us back toward the center of our being, back toward the balance, the nucleus of our being, back toward the Equator, back toward ‘life on the Earth’.

In terms of this goal, Immortality, Materialism is a sin (too much Self-Indulgence) and Spiritual Materialism is also a sin (too much Self-Denial). By ‘sin’, I mean merely a lack of balance, a lack of perspective, a fusion to the ‘skin’ of an extreme, and the diminishment of one’s soul, which is, itself, this balance.

The Sun, as the eternal light of the world, keeps moving. The Sun lights, first, the Day-Houses, the mansions of the sky; then the Sun lights the Night-Houses, the mansions of the Earth. The Zodiac represents this same idea: The Sun resides in 12 houses each year, 12 months, spending 6 months in the Day-World and 6 months in the Night-World.

The Twelve Labors of Hercules is a glyph for the challenges and struggles the Sun encounters in each of the 12 months of the year, a full annual cycle. We will look at this later.

During the Night-Cycle, ‘meaning’ matters, since what the world really ‘means’ (how it really works) can help one overcome the deep depression that is destroying the world-form. During the Day-Cycle, ‘form’ matters, how the world ‘appears’ (‘conformity’ being the rule), because ‘form’ and ‘image’ and ‘conformity to the image’ helps one to get ahead, helps one to ride the corporate (body) current of expansion. Remember Dress For Success, John T. Molloy’s rebellion against the anti-corporate ‘Sixties’, published in 1975, at the bottom of the Night-Cycle. Clothes make the man. Appearances do matter. Give me music that is fun to dance to; I don’t give a damn what the lyrics mean.

The movie ‘American Beauty’ has another take on this theme: ‘In order to be successful I must always project an image of success.’ Surface life is material life – the creed of life centering on ‘how do I look to the rest of the world’. Surface life is ‘ego’ life, fast, active, full of schemes for advancement, wealth, empire. But this life is only half the story – or 1/3 of the story I guess. For those who think the surface life of appearances – the so-called ‘real life’ of matter – is the only life, the decline into darkness promises to be a savage, horrifying, deadly descent.

The middle path -- between these two types of madness -- ‘balances’ the two adversarial principles, much as democracy, as a form of government, balances the two forces of fascism and communism -- providing both forces with a share of ‘resisted’ power while insisting that neither force gains power absolutely. If either force gains power absolutely, then ‘life’ is lost, and rigor mortis (rigid moral test) sets in.

The Night-Cycle worships the ‘living God’ – i.e., God-in-Nature. The Day-Cycle worships God’s Holy Book, a man-made object, instead. Night-Cycle prophets communicate directly with God. Day-Cycle ministers communicate with the word of God, for they are not allowed to approach the throne of God directly as were the prophets of old.

Poetics dissolves the body, that is, the materialistic, egoistical attitude.

New images given the soul in poetic reverie and work stand over against

established images of the world and self, exploding them, dissolving them,

more fully exposing their inferiority. Through poetic madness the opaque,

brittle sheaths of meaning we have built and protected egoistically

shatter and become visible as images themselves. That is to say, they are seen

through, and perceived psychologically, from the perspective of the soul.

Thomas Moore, The Planets Within

CHAPTER THIRTEEN.

TWO PATHS INTO THE FUTURE: LET THE DISMEMBERMENT BEGIN

(Bank-Kings on the Chessboard Fall. Anything ‘too big to fail’ is ‘too big to exist’.)

‘What’s good for General Motors is good for America.’

Charles E. Wilson, General Motors President, then Eisenhower’s Secretary of Defense

When I began writing this book I was under the impression that America was governed, alternately, by two different parties, Republicans (the male principle) and Democrats (the female principle) – and that these political parties ‘represented’ eternal hidden principles that divided history into Day periods of material activity and spiritual dormancy and Night periods of material dormancy and spiritual activity. I have come to revise my thinking in that the political parties now seem rather insignificant – puppets not principles -- and tend to take the form of the spirit (zeitgeist) that is moving them and moving within them.

Matter (and political parties) are like water that takes any shape that contains it. The ‘spiritual containers’ are the archetypes or patterns in the invisible world which give history its shape, described through the forms and the behaviors of material crystallizations of the invisible ideas which motivated and maneuvered them in space-time.

Today, as we sink further and further into economic chaos, it becomes clearer to me that recent America (Day-Cycle America) has been governed not by two adversarial political parties but by America’s bankers and their financial godfathers (banking, investment, insurance ‘providers’) – the American Ruling Class – who lately have owned both parties and for whom both parties are essentially the same, the servants of the lords of the manor.

It should not surprise us that Bill Clinton helped to grease the wheels for a banker’s coup, the deregulation imagined under Reagan but not fully achieved until the democrats jumped aboard.

The rich in America simply finance political campaigns for both parties, all candidates. No matter who is elected, these silent ‘backers’ have an open door to Washington and to state capitols where laws are debated and enacted. Only laws are passed which are approved by the banking establishment. How, otherwise, could credit card companies legally become loan sharks, charging over 20% interest for some remiss debtor’s accounts? I guess insolvency and bankruptcy are better than broken legs and bodies in the East River. But these principles are not altogether different.

The two principles, as I have said, are actually one. The two forces are one. The two political parties are apparently one as well.

In Simon Johnson’s brilliant May 2009 article for The Atlantic, ‘The Quiet Coup’, Johnson writes:

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

Johnson, a professor at MIT’s Sloan School of Management, was chief economist at the International Monetary Fund in 2007-8. Johnson writes about the IMF’s role in international economic collapse: the Ukraine (1994, hyperinflation), Russia (1998, debt refinancing), Indonesia (1997, currency collapse), South Korea (1997, foreign credit withheld): ‘to IMF officials, all of these crises looked depressingly similar’.

Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise.

In other words, the Masters of the Universe get to keep all the profits they make (millions of dollars in bonuses, in addition to stock options and inflated salaries); and the government uses taxpayer money to bail them out when they fall on their collective face. It’s a nice arrangement, if you can get it. How do they get this arrangement? Bribery, sweet-heart deals, campaign contributions, jobs after congressional or senate tenure expires or is withdrawn.

Corruption. The American government is clearly corrupt beyond description. The corporations have taken over control of the American body politic – the Day-Cycle affirms the ‘body’, the corporate/corporeal nature, so this should not surprise us – and now the government is looting the American treasury – stealing on a level never before seen – in order to preserve the lucrative system the mutual admirers have built together for each other.

Johnson continues:

But inevitably, emerging-market oligarchs get carried away; they waste money and build massive business empires on a mountain of debt. Local banks, sometimes pressured by the government, become too willing to extend credit to the elite and to those who depend on them. Overborrowing always ends badly, whether for an individual, a company, or a country. Sooner or later, credit conditions become tighter and no one will lend you money on anything close to affordable terms.

The downward spiral that follows is remarkably steep. Enormous companies teeter on the brink of default, and the local banks that have lent to them collapse. Yesterday’s “public-private partnerships” are relabeled “crony capitalism.” With credit unavailable, economic paralysis ensues, and conditions just get worse and worse. The government is forced to draw down its foreign-currency reserves to pay for imports, service debt, and cover private losses. But these reserves will eventually run out. If the country cannot right itself before that happens, it will default on its sovereign debt and become an economic pariah. The government, in its race to stop the bleeding, will typically need to wipe out some of the national champions—now hemorrhaging cash—and usually restructure a banking system that’s gone badly out of balance. It will, in other words, need to squeeze at least some of its oligarchs.

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique—the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large.

We see from this picture where we Americans are headed. We are heading for riots, killed demonstrators, shamed politicians, political resignations, more suicides, and, inevitably, more and more regulation of business. (As I write this thousands of protestors are gathering in London to demonstrate against corruption and theft at the G-20 Conference. Violence and rioting seems very likely to be a central part of this conference.)

What is the best, most natural, relationship between business and government? Lovers? Protectors? Mutual back-scratchers? Stealthy allies in the rape of the home country?

During the Day-Cycle this seems inevitable. Money doesn’t talk it swears. Who can resist the lure of maximum comfort and the (relative) exile of death. Money gives the illusion of safety, the illusion that Death and Darkness have sent out to sea, and no longer threaten wonderful life on the magic island. It is an illusion of course. Rich people die. Rich people get divorced. Rich people have children who get leukemia. But the illusion is very powerful. When chasing the great whale of material ambition – during the chase itself, which cannot end, because absolute wealth is never attained – the illusion of power, the illusion of really being Masters of the Universe, weaves a dream of god-like golden omnipotence.

How far the mighty can fall!

What comes next? According to Johnson, some sacrificial lambs among the avaricious entrepreneurs have to be sacrificed, offered up for public wrath if nothing else.

Eventually, as the oligarchs in Putin’s Russia now realize, some within the elite have to lose out before recovery can begin. It’s a game of musical chairs: there just aren’t enough currency reserves to take care of everyone, and the government cannot afford to take over private-sector debt completely.

So the IMF staff looks into the eyes of the minister of finance and decides whether the government is serious yet. The fund will give even a country like Russia a loan eventually, but first it wants to make sure Prime Minister Putin is ready, willing, and able to be tough on some of his friends. If he is not ready to throw former pals to the wolves, the fund can wait. And when he is ready, the fund is happy to make helpful suggestions—particularly with regard to wresting control of the banking system from the hands of the most incompetent and avaricious “entrepreneurs.”

Of course, Putin’s ex-friends will fight back. They’ll mobilize allies, work the system, and put pressure on other parts of the government to get additional subsidies. In extreme cases, they’ll even try subversion—including calling up their contacts in the American foreign-policy establishment, as the Ukrainians did with some success in the late 1990s.

Many IMF programs “go off track” (a euphemism) precisely because the government can’t stay tough on erstwhile cronies, and the consequences are massive inflation or other disasters. A program “goes back on track” once the government prevails or powerful oligarchs sort out among themselves who will govern—and thus win or lose—under the IMF-supported plan. The real fight in Thailand and Indonesia in 1997 was about which powerful families would lose their banks. In Thailand, it was handled relatively smoothly. In Indonesia, it led to the fall of President Suharto and economic chaos.

Johnson compares the United States to the Emerging Market countries and economies the IMF has bailed out: ‘Banana Republics’ Johnson calls them. In his view, because of greed, corruption, bad judgment, lack of necessary regulation, too much power concentrated in too few hands in the financial community, and the financial industry’s incestuous relationship with their supposed regulators, the U.S. Government, America has become a kind of super-sized ‘banana republic’, albeit one with, admittedly, the world’s most advanced economy and government, and also with the world’s most sophisticated oligarchy.

As Night-Cycle disillusionment with the ‘establishment’ sets in, energy is abstracted from the edifice of empire; unity is lost; fragmentation occurs. The perception that ‘we are all in this together’ changes into something like this: ‘The laws are made by and for the rich.’ This is a first step toward the divorce or dismemberment that characterizes the Night-Cycle. The Proud (Ego) is heading for a fall, a fatal fall – ‘fatal’ suggesting a periodical disappearance -- that will send him to hell for judgment, disgrace, self-abhorrence, and, perhaps, eventually, rebirth. (This Ego wins back his self-respect – and the respect of his community – by some heroic act, often a war, often by defeating a hideous monster who is lurking, waiting for him in the Darkness. We will speak more about this later.)

Once the Son rebels against the Father, there is a guaranteed long and strange journey into the Underworld before the Holy Spirit again appears and raises the Son back into Heaven and back into a state of Atonement with the Father.

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership – the ‘home-ownership is not a right’ group. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership and the demotion of rigorous loan eligibility requirements—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

Of course, the U.S. is unique. And just as we have the world’s most advanced economy, military, and technology, we also have its most advanced oligarchy.

In a primitive political system, power is transmitted through violence, or the threat of violence: military coups, private militias, and so on. In a less primitive system more typical of emerging markets, power is transmitted via money: bribes, kickbacks, and offshore bank accounts. Although lobbying and campaign contributions certainly play major roles in the American political system, old-fashioned corruption—envelopes stuffed with $100 bills—is probably a sideshow today, Jack Abramoff notwithstanding.

Instead, the American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

Clarity is a dangerous thing. Clarity makes it impossible not to see the truth (or the half-truth), which limits one’s ability to love oneself indefinitely without recognizing the shadows that begin to grow in one’s own expanded atmosphere.

We all move between the poles of self-indulgence and self-denial, self-love and self-hate…Noon and Midnight, Body and Spirit, into and out of sin, into and out of salvation from sin.

It is telling that Dwight D. Eisenhower, when serving as President of the United States, nominated Charles Wilson, former president of General Motors Company as his Secretary of Defense. Afterall, the military, over which the Secretary of Defense keeps watch, is the police force of America’s corporations, a power wielded by America’s government. It’s job is to make sure that foreign nations respect America’s business enterprises, and open markets to America’s exports. This helps Americans maintain the highest standard of living on the planet.

When Charles Wilson says: “What’s good for General Motors is good for America, and vice versa” he is speaking a very deep commitment that America’s destiny (destiny as meaning its only ‘identify’) is in getting rich through business. But America is more about more than just getting rich. America is about political and religious freedom; America is about supporting the moral position, which often means supporting the underdog politically and socially.

Business almost always supports the ‘overdog’. Business supports the status quo – abhors change that threatens its ability to make money.

Materialism is part of the picture of the American Dream, surely. But it is not the entire picture. The American Dream is about America being a lifeboat, a sanctuary, for world refugees, those who have been squeezed out of other nations for political or religious reasons. I hesitate to write for ‘economic’ reasons. I’m not sure that we should consider material success to be an ‘economic right’, especially considering – as this book proclaims – cycles of economic expansion and contraction to be inherent in God and Nature’s Earthly design.

Do I like the fact that the American government uses its military to bully smaller countries into bending their own laws, customs and politics to conform to the will of America’s business culture? No, I don’t. Is America alone in using its political and military might for the benefit of its own citizens? No, it is not. All countries – except in very rare instances -- put self-interest first.

Adam Smith – the 18^th century economist of the Scottish Enlightenment -- the Gordon Gecko of his era (to be fair to Adam Smith, he did say more than just that ‘Greed is good’ and he said much more about morality than Gordon Gecko ever did) wrote that the pursuit of ‘self-interest’ served the society best. America has honored this doctrine, from its Calvinist beginnings, through its most recent Calvinist manifestation – Ronald Reagan – as the meat and potatoes philosophy of its Day-Cycle incarnations.

Smith’s ‘trickle down’ theory delivered in his magnum opus An Inquiry Into the Nature and Causes of the Wealth of Nations was an early shot across the bow for Western Ego expansion and diminishment of non-Western shadows throughout the world. Smith’s encouragement to empire – much like Darwin’s ‘the survival of the fittest’ doctrine – made a virtue of dominant bullying economic expansion. The survival of the fittest meant that those who rose to power and wealth were doing the will of God; and those these men of action trampled, killed, stole from were Nature’s ‘losers’ in an evolutionary sense. ‘Moral judgment’ and ‘moral living’ was for weak-willed losers: artists, poets, priests, prophets, lovers, women, negroids, and other forms of ‘degeneracy’.

The will to power was a gift through which God’s majesty was proclaimed. Of course, many Nazis (and fascist philosophers) felt this also.

Adam Smith presaged Ayn Rand, Alan Greenspan, Ronald Reagan. Ayn Rand writes:

Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns--or dollars. Take your choice--there is no other.

Ms. Rand also wrote:

Thanksgiving is a typically American holiday...The lavish meal is a symbol of the fact that abundant consumption is the result and reward of production.

This is a half-truth of course. In the year 2006 – when Americans had ceased to be known for their powers of production but more for their powers of consumption, which rendered them sick with a moral case of arrogant obesity – abundant consumption was the result and reward of debt, debt, debt.

The ‘invisible hand’ that Adam Smith premised protected society energized by the relentless expansion of ego ambitions became, hundreds of years later, the nonexistent hand on the button of business regulation that was supposed to protect the American (and world) public from unscrupulous financial practices. Maybe it’s time for a visible hand, a substantial hand, to press the button now.

My criticism of the Enlightenment (Science, Science, Science) is not absolute. I understand that the ‘Father’s vision’ is part of the whole; and that the political manifestation of this vision (which is always a form of racism and fascism) is also part of the equation of the whole. I have embraced this vision myself – in my own post-Jimmy Carter era reincarnation, which I will describe more fully later – and I admire the power of individual creative will that springs from this source. Much good for the world does come out of selfishness and self-centered Ego-Mania. But there is a shadow side also, a dark side which cannot be perceived during the incarnation itself, when the illusion of god-like greatness, power and righteousness lead to injustice, meanness, crime and acts of oppression.

The Master of the Universe is a Day-Cycle figure that is, some might say sadly, not omnipotent, not omniscienct, and certainly not eternal. Kings fall – even King’s on the chessboard fall. King-Makers fall. The King of the Hill is always replaced by another. An empire falls. Wall Street falls.

God punishes those who make money their god. Nothing is more clear in the bible than this.

‘Thou Shalt Not Put False gods Before Me.’

Is it naïve to wish for a ‘moral’ national foreign policy that does not seem too often to mimic a season of the Sopranos? Perhaps it is. The truth is that America’s foreign policy is imperfect. The other side of this truth is that the world is a dangerous place, with many injustices, many terrors, many horrors about to happen; many war-lords ready to rise; many wars on the verge of breaking out.

Greed and violence are not American creations, although they are dramas with which America seems obsessed as a culture and from which America, today, seems to derive her identity.

Competition is part of the world. But it is not the entire world.

War is part of human existence. But it is not the only part.

As a culture we have become obsessed with the reality-game-show ‘King of the Hill’. Many of us played this game as children. We might be walking with a group of four or five other boys, one of whom spied a knoll or rise in the landscape. He assaulted the ‘hill’, declared himself ‘King of the Hill’ – and the fight was on. It was all against the king until he was overthrown, cast down the side of the hill by his competitors. Finally, the ‘toughest’ boy inherited the hill, when everyone else was tired or became disinterested. Two lessons I learned from this game: (1) It was no fun to be ‘king of the hill’, since this status meant one would have to fight the entire world to stay in power; (2) there was no inherent value in the hill. When others lost interest in conquering ‘your’ hill, the hill reverted back to its original state of material nullity.

If the ‘Father’s vision’ – capitalism, individualism, militarism, racism, scienceism – is imperfect, it’s opposite, the ‘Mother’s vision’ – communism, tribalism, pacifism, classlessism, mysticism – is also imperfect. Each are half-truths. Nature’s design is that each extreme might rule for a period of time, but must evolve in to its opposite in the interest of evolutionary progress.

America has acted as the ‘world’s policemen’ – Pax Americana being very reminiscent of Pax Romana of Roman Empire domain-- in her own interest since World War II but also in the interest of much of the world. Clearly America has protected Western Europe from the cannibalism of Russian ‘sovietism’ for nearly 60 years. No matter how you cut this picture, the Eastern European block during that time was noted for poverty, backwardness, gulags, shock-treatment of political prisoners, oppression of dissent, racism, cronyism, corruption, ecological destruction, political terror and assassination…it is really impossible to put a good spin on Russian communism and its failed ‘moral’ alternative to capitalism. Perhaps it was just Russia? No, not really.

China had the horrors of ‘Maoism’: mass starvation after Mao decided to ‘corner the market on steel’, ordering every Chinese citizen to donate every steel implement to the mission: pans, farm implements, shovels, picks, discarded machinery were dutifully smelted in backyard barbecue style low temperature stoves…. This campaign was a dismal failure, the steel was worthless, and common Chinese were left without basic utensils needed for cooking and farming and building. This helped to lead to a half-decade of mass starvation – people eating tree bark until they died -- while Mao entertained himself with 13-year-old boys and girls every evening after dinner. Then, of course, there was also the ‘Cultural Revolution’, wherein Mao’s spectacular insight led to his call for a ‘perpetual revolution’. Middle aged party functionaries were led through the streets of towns and cities throughout China, proclaimed ‘Enemies of the Revolution’, were beaten, humiliated and sometimes killed, were actually eaten by Chinese citizens in several incidents, especially in southern China, as a sign of the ultimate public humiliation. Well, maybe Russia and China were not the best testing grounds for the communist experiment.

Cuba then. Cuba, following Fidel Castro, decided to corner the market in sugar. Every plantation in Cuba was order to plant sugar – Castro apparently foresaw himself as the master of the Sugar Cartel similar to the Arab Oil Cartel, whereby he would bring western capitalist countries to their collective knees, especially the arch-enemy America. But overproduction of sugar drove down prices. And over-planting of sugar damaged the Cuban soil since sugar is apparently very hard on the nutritional capacity of the soil. It was the same old story in Cuba: the worse the planned economy performed, the more the government found indigenous scapegoats to blame for the government’s failures.

Cambodia, then. No, let’s not even bring up Cambodia.

It would be nice to have a ‘saintly’ government. But it seems not really possible, unless one is willing to endure absolutely horrible moral returns during the process. (Communism was supposed to be a ‘saintly’ government, was it not: fair, just, with equal social classes, etc.)

All humans, all governments, everything in Nature, is good and bad at the same time. That is the paradox. America is good and bad, dark and light, masculine and feminine. Often the conscience, seeing imperfection in one extreme of the continuum – Noon, for instance, capitalism – runs to the opposite pole, seeking purification and truth, moral identity, by embracing the anti-thesis of the most recent form of imperfection.. But both poles are incomplete by nature – that is, both poles are sinful.

Is America really required by history to fulfill the Material Pole at this time and space (the ‘Antipode’ according to Hinduism)? Perhaps America is. One potential path into the future, for America, is to follow this destiny of the Material Giant of the world. It is not a very attractive destiny. Rome tried it. And Rome was eventually destroyed by this role.

The greatest danger facing America over the coming decade will be the loss of her democracy. The stress being put on Americans and on America’s government today will only get worse as the economy de-materializes and international anxiety (and international political and military chaos) increase exponentially.

We know we do not want to sink too deeply into the mistake of the southern pole extremism of Self-Denial after having recently rose so triumphantly (and much too proudly) to the northern pole extremism of Self-Infatuation.

We do need to dismember the Banking Cartel that is now ushering America to ruin. We need to detach the Financial Kingdom on Wall Street from the government – and this is a form of castration. I understand this. This is not a moral obligation – but is a dictate of Time. (Saturn is the god of Time – and Saturn has ended Time by bringing us the ‘end of the world’, the sabbatical, the 7^th Day of Creation.)

The Night is coming on; and there is nothing we can do about it – except swim with the tide the best that we can. To do this, we need to learn how to speak the ‘language of the night’ – the metaphoric or symbolic tongue embedded in poetry, high-level literature, mysticism, and dreams. We need to understand how to navigate through the very different ‘subjective’ landscapes that appear in the Night-Light, so different than the objects we encounter in daylight during the Sun-Cycle.

We have no choice. We are going in to the Darkness. Men have lost their power and the Night is winning. Will and Science and Reason have lost their ascendancy.

Can’t we just go back to pretending that everything is ok in America? Weren’t we all doing so well just a decade ago, before the Twin Towers were hit? Wasn’t everything just about perfect then? Well, not really. The great global economic boom as a bubble, an illusion, blown by bankers to make us feel good – like we were all getting rich – but, in fact, some people were getting rich; but most people were living way beyond their means, becoming debt-slaves.

The debt is the bubble. One can’t solve a debt problem by taking on more debt. We must, as a nation, go through the painful process of unwinding this debt – and no one in power is willing to tell Americans this because it would be political suicide to say so. The illusion that all the politicians are destined to try to perpetuate is that we can keep living as we’ve always lived, we can keep spending as we’ve always spent, and we can keep ignoring the negative as we have always ignored the negative. There is only the phrase: ‘I CAN’ in American; not: “I CAN’T”. Positive thinking will carry us through. No one can stop us if we ‘fight, fight, fight’. No one can stop us if we ignore the doom-sayers, and ‘work, work, work’ – or, more likely: ‘spend, spend, spend.’

Republican (or Democratic) cheerleading will not get us out of this crisis. They are the ones who got us in to this crisis.

Let’s look again at our debt bubble:

This chart, as telling as it is, shows total U.S. debt as a percentage of GDP – the greatest debt ratio in the history of the U.S. Corporate debt is less than 1930 – but corporate debt will grow as the economy sinks and corporate profits decline. A chart showing U.S. debt as a percentage of Income would look even worse. Debt is growing; GDP is shrinking. The picture is actually worse today as government debt is now exploding upward, with Barak Obama’s attempt to defeat deflation by re-bubbling America.

I don’t really blame Obama for doing this. He can’t really sit on his hands and wait for the bottom to drop out. Republicans are offering such ‘creative’ alternatives as lower taxes and (what?) less business regulation. In fact, that’s always the Republican solution; at least it has been over the last half century. This works when matter is expanding. It does not work when matter is contracting.

And with collapsing housing prices, the picture gets even worse, if we factor in evaporating personal wealth. Personal income is shrinking and debt is still growing.

Maybe if Bernanke buys enough Treasury Bonds, driving investors out of bonds as yields shrink, just maybe we can ignite another stock market bubble and get everyone to forget about how bad the map really works.

One in 7 Oregonians is now on Food Stamps. Over 11% of the working populace has lost their jobs. It will be interesting to see how long it takes before Obamaville’s begin springing up across the country. (Again, Obama inherited this problem – he did not create it. The corruption of both parties, and the intellectual (?) leadership of the Republicans is what brought this catastrophe to a head, a doctrine which handed the keys to Fort Knox to the crooks on Wall Street who had fed Americans the myth of the ‘Cult of the Financier’, an idealization of greed and of cannibalistic commerce.)

So, no, we cannot go backwards, back in Time. History will not allow it.

Johnson continues his autopsy of the financial collapse:

A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true. Alan Greenspan’s pronouncements in favor of unregulated financial markets are well known. Yet Greenspan was hardly alone. This is what Ben Bernanke, the man who succeeded him, said in 2006: “The management of market risk and credit risk has become increasingly sophisticated. … Banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks.”

Of course, this was mostly an illusion. Regulators, legislators, and academics almost all assumed that the managers of these banks knew what they were doing. In retrospect, they didn’t. AIG’s Financial Products division, for instance, made $2.5 billion in pretax profits in 2005, largely by selling underpriced insurance on complex, poorly understood securities. Often described as “picking up nickels in front of a steamroller,” this strategy is profitable in ordinary years, and catastrophic in bad ones. As of last fall, AIG had outstanding insurance on more than $400 billion in securities. To date, the U.S. government, in an effort to rescue the company, has committed about $180 billion in investments and loans to cover losses that AIG’s sophisticated risk modeling had said were virtually impossible.

Wall Street’s seductive power extended even (or especially) to finance and economics professors, historically confined to the cramped offices of universities and the pursuit of Nobel Prizes. As mathematical finance became more and more essential to practical finance, professors increasingly took positions as consultants or partners at financial institutions. Myron Scholes and Robert Merton, Nobel laureates both, were perhaps the most famous; they took board seats at the hedge fund Long-Term Capital Management in 1994, before the fund famously flamed out at the end of the decade. But many others beat similar paths. This migration gave the stamp of academic legitimacy (and the intimidating aura of intellectual rigor) to the burgeoning world of high finance.

As more and more of the rich made their money in finance, the cult of finance seeped into the culture at large. Works like Barbarians at the Gate, Wall Street, and Bonfire of the Vanities—all intended as cautionary tales—served only to increase Wall Street’s mystique. Michael Lewis noted in Portfolio last year that when he wrote Liar’s Poker, an insider’s account of the financial industry, in 1989, he had hoped the book might provoke outrage at Wall Street’s hubris and excess. Instead, he found himself “knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share. … They’d read my book as a how-to manual.” Even Wall Street’s criminals, like Michael Milken and Ivan Boesky, became larger than life. In a society that celebrates the idea of making money, it was easy to infer that the interests of the financial sector were the same as the interests of the country—and that the winners in the financial sector knew better what was good for America than did the career civil servants in Washington. Faith in free financial markets grew into conventional wisdom—trumpeted on the editorial pages of The Wall Street Journal and on the floor of Congress.

From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

• insistence on free movement of capital across borders;

• the repeal of Depression-era regulations separating commercial and investment banking;

• a congressional ban on the regulation of credit-default swaps;

• major increases in the amount of leverage allowed to investment banks;

• a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;

• an international agreement to allow banks to measure their own riskiness;

• and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation.

The mood that accompanied these measures in Washington seemed to swing between nonchalance and outright celebration: finance unleashed, it was thought, would continue to propel the economy to greater heights.

Johnson mentions Brooksley Born. For the record, Brooksley Born sat on the Commodities Futures Trading Commission from 1996 – 1999 and was chairperson from 1998-9. In 1998, Born ‘sought comments’ on the need to regulate derivatives, specifically the ‘dark markets’ of SWAPS, which traded through no national market or central exchange but between two agreeing parties only. Born’s request for comments (‘Concept Release’) stated that the uncontrolled growth of derivatives trading was, perhaps, cause for the CFTC to reconsider regulation of this market. The request for comments was an attempt to discuss the need for regulation; and this was opposed by Alan Greenspan, Federal Reserve Chairman, Treasury Secretary Robert Rubin, Bill Clinton’s financial advisor Lawrence Summers (who is now Barak Obama’s Chief Economic Advisor). In May of that same year, SEC Chairman Arthur Levitt joined the other dissenters in opposing the release of Born’s ‘concept release’. Their argument was that the ‘concept release’, focusing on the risks inherent in this ‘dark market’, might de-stabilize what had become a huge, lucrative global financial market. These men argued that the potential turmoil caused by such a report – and concerns about the imposition of new regulatory costs might stifle innovation and push transactions offshore (we will remember the ‘stifle innovation’ comments by Greenspan also as reasons for his theoretical opposition to the Sherman Anti-Trust Act). Born, in 2008, commented: ‘The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been.’ The adversarial relationship set up by Greenspan against Born essentially suppressed Born’s recommendations and led to the refusal of regulators to even discuss modest reforms.

Johnson continues in his chapter ‘American Oligarchs and the Financial Crisis’:

The oligarchy and the government policies that aided it did not alone cause the financial crisis that exploded last year. Many other factors contributed, including excessive borrowing by households and lax lending standards out on the fringes of the financial world. But major commercial and investment banks—and the hedge funds that ran alongside them—were the big beneficiaries of the twin housing and equity-market bubbles of this decade, their profits fed by an ever-increasing volume of transactions founded on a relatively small base of actual physical assets. Each time a loan was sold, packaged, securitized, and resold, banks took their transaction fees, and the hedge funds buying those securities reaped ever-larger fees as their holdings grew.

Because everyone was getting richer, and the health of the national economy depended so heavily on growth in real estate and finance, no one in Washington had any incentive to question what was going on. Instead, Fed Chairman Greenspan and President Bush insisted metronomically that the economy was fundamentally sound and that the tremendous growth in complex securities and credit-default swaps was evidence of a healthy economy where risk was distributed safely.

In the summer of 2007, signs of strain started appearing. The boom had produced so much debt that even a small economic stumble could cause major problems, and rising delinquencies in subprime mortgages proved the stumbling block. Ever since, the financial sector and the federal government have been behaving exactly the way one would expect them to, in light of past emerging-market crises.

By now, the princes of the financial world have of course been stripped naked as leaders and strategists—at least in the eyes of most Americans. But as the months have rolled by, financial elites have continued to assume that their position as the economy’s favored children is safe, despite the wreckage they have caused.

Stanley O’Neal, the CEO of Merrill Lynch, pushed his firm heavily into the mortgage-backed-securities market at its peak in 2005 and 2006; in October 2007, he acknowledged, “The bottom line is, we—I—got it wrong by being overexposed to subprime, and we suffered as a result of impaired liquidity in that market. No one is more disappointed than I am in that result.” O’Neal took home a $14 million bonus in 2006; in 2007, he walked away from Merrill with a severance package worth $162 million, although it is presumably worth much less today.

In October, John Thain, Merrill Lynch’s final CEO, reportedly lobbied his board of directors for a bonus of $30 million or more, eventually reducing his demand to $10 million in December; he withdrew the request, under a firestorm of protest, only after it was leaked to The Wall Street Journal. Merrill Lynch as a whole was no better: it moved its bonus payments, $4 billion in total, forward to December, presumably to avoid the possibility that they would be reduced by Bank of America, which would own Merrill beginning on January 1. Wall Street paid out $18 billion in year-end bonuses last year to its New York City employees, after the government disbursed $243 billion in emergency assistance to the financial sector.

In a financial panic, the government must respond with both speed and overwhelming force. The root problem is uncertainty—in our case, uncertainty about whether the major banks have sufficient assets to cover their liabilities. Half measures combined with wishful thinking and a wait-and-see attitude cannot overcome this uncertainty. And the longer the response takes, the longer the uncertainty will stymie the flow of credit, sap consumer confidence, and cripple the economy—ultimately making the problem much harder to solve. Yet the principal characteristics of the government’s response to the financial crisis have been delay, lack of transparency, and an unwillingness to upset the financial sector.

The response so far is perhaps best described as “policy by deal”: when a major financial institution gets into trouble, the Treasury Department and the Federal Reserve engineer a bailout over the weekend and announce on Monday that everything is fine. In March 2008, Bear Stearns was sold to JP Morgan Chase in what looked to many like a gift to JP Morgan. (Jamie Dimon, JP Morgan’s CEO, sits on the board of directors of the Federal Reserve Bank of New York, which, along with the Treasury Department, brokered the deal.) In September, we saw the sale of Merrill Lynch to Bank of America, the first bailout of AIG, and the takeover and immediate sale of Washington Mutual to JP Morgan—all of which were brokered by the government. In October, nine large banks were recapitalized on the same day behind closed doors in Washington. This, in turn, was followed by additional bailouts for Citigroup, AIG, Bank of America, Citigroup (again), and AIG (again).

Some of these deals may have been reasonable responses to the immediate situation. But it was never clear (and still isn’t) what combination of interests was being served, and how. Treasury and the Fed did not act according to any publicly articulated principles, but just worked out a transaction and claimed it was the best that could be done under the circumstances. This was late-night, backroom dealing, pure and simple.

Throughout the crisis, the government has taken extreme care not to upset the interests of the financial institutions, or to question the basic outlines of the system that got us here. In September 2008, Henry Paulson asked Congress for $700 billion to buy toxic assets from banks, with no strings attached and no judicial review of his purchase decisions. Many observers suspected that the purpose was to overpay for those assets and thereby take the problem off the banks’ hands—indeed, that is the only way that buying toxic assets would have helped anything. Perhaps because there was no way to make such a blatant subsidy politically acceptable, that plan was shelved.

Instead, the money was used to recapitalize banks, buying shares in them on terms that were grossly favorable to the banks themselves. As the crisis has deepened and financial institutions have needed more help, the government has gotten more and more creative in figuring out ways to provide banks with subsidies that are too complex for the general public to understand. The first AIG bailout, which was on relatively good terms for the taxpayer, was supplemented by three further bailouts whose terms were more AIG-friendly. The second Citigroup bailout and the Bank of America bailout included complex asset guarantees that provided the banks with insurance at below-market rates. The third Citigroup bailout, in late February, converted government-owned preferred stock to common stock at a price significantly higher than the market price—a subsidy that probably even most Wall Street Journal readers would miss on first reading. And the convertible preferred shares that the Treasury will buy under the new Financial Stability Plan give the conversion option (and thus the upside) to the banks, not the government.

This latest plan—which is likely to provide cheap loans to hedge funds and others so that they can buy distressed bank assets at relatively high prices—has been heavily influenced by the financial sector, and Treasury has made no secret of that. As Neel Kashkari, a senior Treasury official under both Henry Paulson and Tim Geithner (and a Goldman alum) told Congress in March, “We had received inbound unsolicited proposals from people in the private sector saying, ‘We have capital on the sidelines; we want to go after [distressed bank] assets.’” And the plan lets them do just that: “By marrying government capital—taxpayer capital—with private-sector capital and providing financing, you can enable those investors to then go after those assets at a price that makes sense for the investors and at a price that makes sense for the banks.” Kashkari didn’t mention anything about what makes sense for the third group involved: the taxpayers.

Even leaving aside fairness to taxpayers, the government’s velvet-glove approach with the banks is deeply troubling, for one simple reason: it is inadequate to change the behavior of a financial sector accustomed to doing business on its own terms, at a time when that behavior must change. As an unnamed senior bank official said to The New York Times last fall, “It doesn’t matter how much Hank Paulson gives us, no one is going to lend a nickel until the economy turns.” But there’s the rub: the economy can’t recover until the banks are healthy and willing to lend.

There’s the rub. There is another rub also. Which American citizens, who are currently maxed out with debt, and perhaps facing a job loss in the family, are going to be interested in taking on more debt to buy cars and houses and boats and second homes they don’t need? Which American citizens who are now watching their mortgage go ‘under water’ are going to be eager to take on debt rather than sock away savings in local banks for emergencies that seem certain to arise? Is the consumer life-style to which we’ve grown so accustomed in the last century in America really viable as a sustainable economic model?

Are we really going to be comfortable as Americans in the future to accept the role of idle consumers of junk (some, admittedly, very sophisticated) to provide tiny gains in salary to Third World workers (the global industrial peasant class) and huge (should I use the adjective ‘obscene’ again) returns to the world’s business oligarchy, which we mortgage our children’s futures to Chinese and Saudi Arabian investors, who thereby gain control of our government through financial extortion?

This is a very important question for us to ask and answer? Is there really such a thing as a global economy? And if there is, we need to find a way to take the oligarchs out of the picture.

At the risk of sounding shrill and repetitive: the problem is that we’ve taken on too much debt. And taking on more debt does not cure the disease.

The first step we need to take to begin recovering from our problem is to let failing companies fail. Banks that fail should be nationalized and run for profit and the profit generated by the nationalized banks should be directed into general government funds to pay for education, health care and other domestic programs.

Banks that fail should not be allowed to return to private hands, at least during the Night-Cycle. Return of bank ownership and control to private hands might be advisable during the Day-Cycle (2019), with the understanding that more corruption in banking would be guaranteed in the decade 2027-2037 and another banking crisis would most likely lead to another depression in 2037.

What our knowledge of cycles indicates is that government/central bank authorities should expect to see and should help bring about would be the periodical lowering of interest rates as Night-Cycles evaporate and the raising of interest rates as Day-Cycles head into exhaustion.

Does this mean that Mister Greenspan should have begun raising interest rates before 2001, as a way easing in to the Night-Cycle of debt contraction smoothly? Yes. But this would have been political suicide, would it not? I’m sure President Clinton would not have smiled gently on the opposition Fed Chairman seeking to suffocate the economy during his watch. That is why the Fed Chairman is supposed to be independent of politics, so he can make the tough call regardless of political needs. But Maestro Greenspan’s ideology was that the Great Depression was caused by an error in monetary policy – not by the inherent gravity/levity mechanism by which Nature avoids extremes.

If we look at a chart of 10-year bond yields from 1962 – 2004, we see quite clearly that bond yields did begin rising about 1965 and topped out about 1983 (September 1981 was the historic top), and that yields fell from 1983 through 2001, at which point they should have begun rising again – had Mister Greenspan not resisted this logic and sought to become a god in opposition to Nature’s rules, a god very much like Melville’s Ahab.

There is proof that Alan Greenspan did recognize his error of force-feeding the system with too much cheap money from 2001-2004 (currency devaluation is another form of inflation) in the chart below. Greenspan realized his policy was an error, and sought to correct it, by raising the Fed Funds Rate thirteen times, from December 2004-June 2006. But it was too late at that point. Moby-Dick had already broadsided the Pequod; and the Global Economy was already taking on too much water for Ahab’s cabin boy, ‘Pip’ Bernanke, to bale out the water. The damage was already done. The Pequod was already under-water.

Some people got rich and got off the boat. Most people got soaked. Many people lost their houses and their jobs and their retirement. Some lost their families; some lost their lives.

Greenspan got off the Pequod in 2006, when he realized the boat he had ‘miscaptained’ (‘Call me Meastro, don’t call me Ishmael’) had capsized and was going down. Greenspan jumped ship right at the market peak and found his way in to the firm of John Paulson, an English hedge-fund speculator, where he apparently advised Paulson on ‘short-selling’ strategies – how to make money on a collapsing economy, sock and credit markets -- collecting millions of dollars a year (I’m assuming), as Paulson’s firm made billions while everyone else was losing half their assets. Very nice maneuvering, Alan. And we thought honor was dead.

No one ever suggested that Alan Greenspan was a samurai. At least Melville’s Ahab had the decency to go down with his whale.

In 2009, Greenspan admitted that the economy head had captained, as the ‘Maestro’ for three decades, was ‘the worst he had ever seen, by far.’ Greenspan added: ‘There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system.’

How close is this ‘home price stabilisation’? I am predicting that this will not happen until around 2019. Charles Hugh Smith predicts, in his chart below, that this will not happen before 2014 at the earliest. I would not argue with a bottom in 2014, with a bounding along the bottom for several years.

This picture coincides with our 18-year cycle quite clearly.

What should be done? Failing banks should be taken over through share purchase in the open market where this is feasible – or pressured into bankruptcy proceedings where share purchase and control is not feasible -- and, ultimately, should be owned and controlled by the public. We can talk later about the mechanisms for this national control and national directorship.

Every depression that has happened in America has been caused by banker greed or by corrupt dealings between private capital centers and private financiers that has demolished wealth on Wall Street and pushed America into a painful Night Season.

Clearly, the Night-Cycle calls for the dismemberment of corporate arrogance and greed – not a permanent dismemberment, but a periodical one. Nationalization is not permanent state ownership. But what needs to become permanent is effective oversight of all corporate mechanisms that lead or might lead to another political coup in which the financial titans take over American policy through the corruption and outright ownership of American politicians (government officials).

Police investigation of white collar crimes committed over the last fifteen years should be pursued vigorously as acts of ‘organized crime’ and guilty officials should be prosecuted with RICO provisions and guilty verdicts should result in criminal sentencing AND absolute confiscation of all wealth and property amassed by the guilty parties. This wealth and property should be returned to the taxpayer either directly or through subsumed into the federal budget to fund taxpayer obligations for domestic, military or foreign government expenditures.

Failure to ‘castrate’ the suddenly monstrous hero, the financial sector – that is, to add an ‘adversarial role’ to the Business-Government love affair -- could result in the growth of revolutionary movements in America for political reform that could, in fact, destroy our democracy.

We should not take democracy for granted. No nation in history has remained democratic for very long (Indian, Spartan, Athenian, Romans, Weimar Republic….). Democracy is not guaranteed. In fact, democracy is the exception in historical development – short in duration, rare in manifestation -- not the rule.

When democracy goes, civil war results. Civil war and political authoritarianism, either Day-Cycle corporate fascism, or the more recent Night-Cycle collective fascism.

Johnson writes in his chapter: ‘The Way Out’:

Looking just at the financial crisis (and leaving aside some problems of the larger economy), we face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support.

Big banks, it seems, have only gained political strength since the crisis began. And this is not surprising. With the financial system so fragile, the damage that a major bank failure could cause—Lehman was small relative to Citigroup or Bank of America—is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington. Bank of America obtained its second bailout package (in January) after warning the government that it might not be able to go through with the acquisition of Merrill Lynch, a prospect that Treasury did not want to consider.

The challenges the United States faces are familiar territory to the people at the IMF. If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say: nationalize troubled banks and break them up as necessary.

In some ways, of course, the government has already taken control of the banking system. It has essentially guaranteed the liabilities of the biggest banks, and it is their only plausible source of capital today. Meanwhile, the Federal Reserve has taken on a major role in providing credit to the economy—the function that the private banking sector is supposed to be performing, but isn’t. Yet there are limits to what the Fed can do on its own; consumers and businesses are still dependent on banks that lack the balance sheets and the incentives to make the loans the economy needs, and the government has no real control over who runs the banks, or over what they do.

At the root of the banks’ problems are the large losses they have undoubtedly taken on their securities and loan portfolios. But they don’t want to recognize the full extent of their losses, because that would likely expose them as insolvent. So they talk down the problem, and ask for handouts that aren’t enough to make them healthy (again, they can’t reveal the size of the handouts that would be necessary for that), but are enough to keep them upright a little longer. This behavior is corrosive: unhealthy banks either don’t lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and as it does, bank assets themselves continue to deteriorate—creating a highly destructive vicious cycle.

To break this cycle, the government must force the banks to acknowledge the scale of their problems. As the IMF understands (and as the U.S. government itself has insisted to multiple emerging-market countries in the past), the most direct way to do this is nationalization. Instead, Treasury is trying to negotiate bailouts bank by bank, and behaving as if the banks hold all the cards—contorting the terms of each deal to minimize government ownership while forswearing government influence over bank strategy or operations. Under these conditions, cleaning up bank balance sheets is impossible.

Nationalization would not imply permanent state ownership. The IMF’s advice would be, essentially: scale up the standard Federal Deposit Insurance Corporation process. An FDIC “intervention” is basically a government-managed bankruptcy procedure for banks. It would allow the government to wipe out bank shareholders, replace failed management, clean up the balance sheets, and then sell the banks back to the private sector. The main advantage is immediate recognition of the problem so that it can be solved before it grows worse.

The government needs to inspect the balance sheets and identify the banks that cannot survive a severe recession. These banks should face a choice: write down your assets to their true value and raise private capital within 30 days, or be taken over by the government. The government would write down the toxic assets of banks taken into receivership—recognizing reality—and transfer those assets to a separate government entity, which would attempt to salvage whatever value is possible for the taxpayer (as the Resolution Trust Corporation did after the savings-and-loan debacle of the 1980s). The rump banks—cleansed and able to lend safely, and hence trusted again by other lenders and investors—could then be sold off.

Cleaning up the megabanks will be complex. And it will be expensive for the taxpayer; according to the latest IMF numbers, the cleanup of the banking system would probably cost close to $1.5trillion (or 10percent of our GDP) in the long term. But only decisive government action—exposing the full extent of the financial rot and restoring some set of banks to publicly verifiable health—can cure the financial sector as a whole.

This may seem like strong medicine. But in fact, while necessary, it is insufficient. The second problem the U.S. faces—the power of the oligarchy—is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy.

Oversized institutions disproportionately influence public policy; the major banks we have today draw much of their power from being too big to fail. Nationalization and re-privatization would not change that; while the replacement of the bank executives who got us into this crisis would be just and sensible, ultimately, the swapping-out of one set of powerful managers for another would change only the names of the oligarchs.

Ideally, big banks should be sold in medium-size pieces, divided regionally or by type of business. Where this proves impractical—since we’ll want to sell the banks quickly—they could be sold whole, but with the requirement of being broken up within a short time. Banks that remain in private hands should also be subject to size limitations.

This may seem like a crude and arbitrary step, but it is the best way to limit the power of individual institutions in a sector that is essential to the economy as a whole. Of course, some people will complain about the “efficiency costs” of a more fragmented banking system, and these costs are real. But so are the costs when a bank that is too big to fail—a financial weapon of mass self-destruction—explodes. Anything that is too big to fail is too big to exist.

To ensure systematic bank breakup, and to prevent the eventual reemergence of dangerous behemoths, we also need to overhaul our antitrust legislation. Laws put in place more than 100years ago to combat industrial monopolies were not designed to address the problem we now face. The problem in the financial sector today is not that a given firm might have enough market share to influence prices; it is that one firm or a small set of interconnected firms, by failing, can bring down the economy. The Obama administration’s fiscal stimulus evokes FDR, but what we need to imitate here is Teddy Roosevelt’s trust-busting.

Caps on executive compensation, while redolent of populism, might help restore the political balance of power and deter the emergence of a new oligarchy. Wall Street’s main attraction—to the people who work there and to the government officials who were only too happy to bask in its reflected glory—has been the astounding amount of money that could be made. Limiting that money would reduce the allure of the financial sector and make it more like any other industry.

Still, outright pay caps are clumsy, especially in the long run. And most money is now made in largely unregulated private hedge funds and private-equity firms, so lowering pay would be complicated. Regulation and taxation should be part of the solution. Over time, though, the largest part may involve more transparency and competition, which would bring financial-industry fees down. To those who say this would drive financial activities to other countries, we can now safely say: fine.

Johnson is saying almost everything that needs to be said on these points.

Hedge funds need to be regulated. France and Germany are holding out for hedge fund regulation in the 2009 G20 Conference in London. Obama is resisting too much regulation. But we should remember: regulation today means deregulation in 18 years (or so). Nothing is permanent. Re-regulation helps to dismember a psychotic King Kong who is currently trashing New York, London, Tokyo, Peking, Berlin, Paris, and Las Vegas, Miami, Los Angeles, and the Seychelles Islands.

Johnson offers us two paths out of chaos – we will offer a different version of these two paths at the end of this chapter.

‘Two Paths’

To paraphrase Joseph Schumpeter, the early-20th-century economist, everyone has elites; the important thing is to change them from time to time. If the U.S. were just another country, coming to the IMF with hat in hand, I might be fairly optimistic about its future. Most of the emerging-market crises that I’ve mentioned ended relatively quickly, and gave way, for the most part, to relatively strong recoveries. But this, alas, brings us to the limit of the analogy between the U.S. and emerging markets.

Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money—or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years—as Japan did during its lost decade—never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past—involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

I see two paths also. Democrats will have to divorce themselves from the Wall Street oligarchy – even though they clearly don’t want to. The oligarchy knows where all the bodies are buried – and a lot of the bodies are covered with fingerprints of Democrats. The more investigation there is, the more the government is exposed and shamed. Also, many in government are afraid to gore the Wall Street bull because they fear such an act would injure American prestige, global power, and cash-generation potential. (Everyone likes a Bull Market.)

As well, no one wants an open class war in America. A class war is a few small steps from an outright civil war. Obama is obviously aware of the history of centrist power in America being the captain’s chair in term’s of benefiting re-election. But these are not ordinary times.

If Obama pushes the power of Wall Street too hard, too early, he might even invite a coup through political assassination. Obama is walking on a very thin tightrope at the moment.

If the Democrats drag their feet, it may become clearer and clearer to American citizens that there is no different between Democrats and Republicans. They are really the same organism, each enjoying their chance to eat the cake, while America drifts into desolation. This will lead to the fragmentation of the party, and perhaps the creation of a third party.

Newt Gingrich is warning of a third-party in 2012, splitting the Republicans into ‘big government’ and ‘small government’ factions. The Democrats could split into ‘Pro-Business’ and ‘Anti-Business’ factions. We could have four parties in 2012, instead of two.

To avoid this, Obama needs to pick up the tradition banner of the Democratic Party, side with the growing poor class of Americans, and throw the rich class to the wolves. If he does not do this, he will be a one-term president and America will sink into a kind of open class warfare.

The Republican ideas are not really relevant until about 2019, so they will not be taken seriously as a political party for some time now. They have been smeared with the blood of the lamb, and stand accused of having destroyed the party, forcing the Democrats to be the ones who have to turn out the lights.

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6 December 2014