Friday, June 3, 2011

My Own Personal Cognitive Dissonance... And What to Do...

Updated, Sat, June 4, 5:11 PM ET


Reader Goldsaver sent an interesting and long response to my article too.  Please read his response after Cognitive Dissonance's response.  Looks like this article hit a nerve!


Updated, Sat, June 4, 3:09 PM ET 

Please go to bottom of article for a comment received by email from Cognitive Dissonance himself.

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In which even the title of this article rips off two of my most highly respected writers / bloggers in the country ("Cognitive Dissonance" of www.zerohedge.com) and FOFOA (fofoa.blogspot.com)!

On Friday, I watched with mild horror as the markets were taken down yet again (except for GOLD, bitchez!, up $9.00/oz) by more bad economic news (the unemployment rate rose from 9.0% to 9.1% for starters).  The Dow did not like that, being down some 110 points in the amount of time I could take three slow breaths at its open...

For some time now (starting from the time of Jimmy Carter!) I have had occasional bouts of nervousness about America's financial position.  This kind of background anxiety, this feeling that "Something wicked comes this way" has been a feature, on and off, of my life for years.  It started getting more noticeable about 2005 or so, when housing was clearly in an epic Bubble.  And it got worse in 2007, right before the Bear Stearns collapse kicked off the dominoes and led to the Crash of 2008/9.

So, why do I now write about this now?  Because I believe I have identified what ails me: cognitive dissonance.  Cognitive dissonance is (REMEMBER, your congenial host of this blog is NO EXPERT in anything) the feeling of anxiety / loss of control / unaccounted nervousness & stress that is not really obvious to the one suffering from it.  Especially re money...

The guy who has nailed this concept the best is IMO "Cognitive Dissonance", a very smart A-level writer at zerohedge.com.  In long and hard to read (because he introduces psychological concepts that he forces us to examine and rub our noses into, even while very ugly...) articles he asks us to push HARD against the lies, propaganda and conditioning happening to us by various Top Dogs (my words) upon us, the American people.

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Well, earlier on Friday (US ET), I dropped off my wife at a mall so she could could get hard to find items (she is very petite and has trouble finding things that she likes in her size).

I dropped her off at the mall, and had brought print-outs of material to read while at lunch.

The material I brought was, in general, VERY NEGATIVE about our (USA) prospects over the next whatever you want to name the number of months to come.  And while eating my Whopper at Burger King, I was watching the Dow, heading down...  Bad for me, and bad for my country.  I went back to the piece I was reading (by a VERY BEARISH guy), and I paused, looked around me and thought: we are NOT going to get out of this without awful and horrendous pain...

And then the MENTAL pain hit me...  While I am OK if the SHTF, probably, I know that many in America are not.  Our country has no apparent 'way out of the box', in other words, it looks to me IMO, that a very nasty short to medium  term future could be ahead of us.  Bad, bad, bad.  If things go off the rails, there will be tremendous suffering...

I then realized that the fear and anxiety I had at Burger King was likely "cognitive dissonance" in which the lies that the powers that be (TPTB) actually spread are indeed LIES!  When the lies induce the people to accept a ROTTEN DEAL from the Banksters and our own government SHOULD be rejected as the lies of a powerful elite, then I saw the light...

It looks like from your observer and congenial host that we are being lied to...  By our own government (surprise!) and then the mainstream media...

If you and your family do NOT own physical gold (that is, in your own hands held there at home), then you should consider:

Buy.Gold.Now.  (physical gold only in your own possession only).

Your Comments and emails are welcome.


Respectfully submitted,

R A Mix

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From Cognitive Dissonance:


Robert,

We all think of a Cognitive Dissonance as an event specific occurrence. For example, we find evidence that our spouse is cheating yet s/he strongly denies doing so and we want to believe him or her. Or our boss assures us there is no reason to lay off half the work force when clearly the company is losing business and must shed employees.

What you are describing in your post is what I term a General Cognitive Dissonance that is not specific to any one event or occurrence but rather expresses itself as overall feelings of dread, worry or fear. Interestingly I am in the middle of an article that discusses this exact phenomenon and hope to post it soon on Zero Hedge.

Basically it is as you describe where you can see from a big picture point of view how totally clueless the general population is to the coming storm and your mind reels when it begins to contemplate the wrenching social, emotional and physical dislocations coming round the bend. It is not a pretty sight to behold and if one is not proactive in seeking inner peace with regard to what you are and are not responsible for and what you can and cannot do about it, these growing internal fears can tear you apart.

Once again it is the reason why any personal search for a higher awareness and enlightenment must always begin within. In order to know something, first we must know ourselves. In order to heal something, first we must heal ourselves. As long as we wish to believe it is more complicated than this we will continue down our current path of self destruction beginning within ourselves.

Yours,

Cognitive Dissonance


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Below response is from reader Goldsaver:

This is a piece I wrote for a private group. Not my normal writing style, just having fun with it.

What is the Matrix?

You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad. It is this feeling that has brought you to me. Do you know what I'm talking about?   –Morpheus

You have this strange feeling that something is wrong. You go to work, you pay your taxes, and you go to church. But there is something wrong. You can feel it right there at the base of your spine.

There is an emptiness and a feeling of fear that you just can’t put your finger on. So you look for the answers.

The media tells you to consume more while at the same time makes you feel greedy for doing so.

Society tells you to buy a bigger house and a bigger car and a bigger boat while at the same time telling you about a poor boy in Brazil that you need to feed. You are confused. How can you be responsible for little Raul’s hunger? So you send a few bucks and hope he will be alright. Yet, you still feel guilty.

Churches tell you to give 10% of your income and care for the poor or face eternal damnation while and you see the preacher driving a new Cadillac.

Yet you continue to struggle. You work harder and harder. You produce more and more. You consume more and more. You see GE making billions and paying no taxes and feel you afraid to take a tax deduction.

Yet this feeling remains.

Is the feeling you get when you realize the Federal Taxes you paid could have paid for your kid’s college tuition instead of having to take out a student loan.

Is the feeling you get when you hear about some new TSA procedure or some new dictate from the politburo, while at the same time thinking that you live in the land of the free.

It is Cognitive Dissonance, your brain struggling to accept two diametrically opposed concepts.

I know exactly how you feel.

And I have a secret. I know why you feel this way. I know the secret your brain is struggling to reconcile.

I know why you're here, Neo. I know what you've been doing... why you hardly sleep, why you live alone, and why night after night, you sit by your computer...  I was looking for an answer. It's the question that drives us, Neo. It's the question that brought you here. You know the question, just as I did. - Trinity

This secret is so terrible in its simplicity your mind can not accept that you have not seen it.

I can tell you the secret. But I can only show you the door, you have to be ready to walk thru it.

This is your last chance. After this, there is no turning back. You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes.</i> - Morpheus

The reason why you have this constant feeling that there is something wrong. The feeling that you are a hamster going around and around a wheel and going nowhere. It is a terrible secret.

The fear you have been feeling? The fear that they are controlling you with?

Your freedom is not evil. You are not guilty. The fear is not yours.

The fear is theirs.

It is the fear of the evil leeches and moochers and swindlers that have built the Matrix around you. It is pure terror. Yes. The terror that you will discover this basic truth.

The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work, when you go to church... when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.

It is a banking system and a financial system. It is food marketing and food distribution. It is in what you buy and how you buy it. It packages, wraps and advertises. It recommends, it mandates, it controls. It is the reason why no matter who wins elections, nothing ever changes. It is in your kid’s schools and in your entertainment.

What is the truth?

The system that you see around you is designed for one thing and one thing only. To turn man into a machine for the purpose of production. Production for the benefit of the Ruling Class.

What is the truth?

That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind. - Morpheus

Is this too radical a concept for you? Did I go too far? I know you are thinking; “Common GS, I know things are getting bad, but we are sure to get a different President next time and we’ll be alright.”
Really? Do you really believe that it will make a difference? Do you really believe anything can make a difference at this point?

Do you believe that it is air you are breathing?  In here?

I don’t want you to believe me. Belief requires faith and I have no use for your faith. I only need you to understand.

Do not try and bend the spoon. That's impossible. Instead... only try to realize the truth. 

 What truth?
 There is no spoon

That mortgage you bought your house with, the money did not exist before you signed it. You think that they loaned you their money? Nope, they loaned you yours. And they are charging you interest on it.

There is no mortgage.

That 401K you have been putting “money” in. You know the one. The one that will help you retire at 60 if you just follow that pretty green line. That is you loaning your wealth to investment bankers so they can buy new stuff. Do you really think you will ever accumulate enough to replace your income for 20-25 years? You were told that it would. But it won't. Don't believe me, do the math yourself.

There is no retirement.


Do you think that it is money you are working for? Look at it. Is that money? That piece of linen with pretty drawings or the digital entries in a bank's computer? The currency you are using is nothing more than credit coupons on your future labor and the labor of your fellow slaves.

There is no money.

Call me a radical. Hand me the tin foil if you wish. But at least open your eyes and look at the ugly truth in the face. You were born an Indentured Servant and are living in a system designed to keep you in the service of the Banking Masters for the rest of your life. The moment you wake, you wake in debt. Even if you succeed in paying off all your debt the very currency you are using is debt. And the Masters are making a profit from it.

Do you know how money is “created”?

The Treasury Department prints pretty pieces of paper called Treasury Notes. Not US Dollars; Treasury Notes. But, what is a note? A note is a promise. Not unlike a check or a mortgage. It is a promise to provide the holder of that note with a fixed number of dollars. And who is backing that promise? You are. Your future taxes. A portion of your future production. A piece of your life. The Federal Government is mortgaging a portion of your life to the holder of the note.

 In exchange for what? I mean, if they are going to promise a piece of my life without my permission, it better be good. Right?

The Treasury Notes are sold in auction to three types of buyers: Direct, that is you and I, Indirect, that is Foreign banks using a primary dealer (a select group of banks) as an agent and the Primary Dealers. Who are the Primary Dealers? The banks that are the major shareholders of the Federal Reserve Bank, that’s who. Wait, isn’t the Federal Reserve Bank part of the Treasury? Nope. It is no more Federal than Federal Express. It is a private banking cartel established (privileged) by the Federal Government in 1913.

Ok, so what?  you ask.

Want to know where the Primary Dealers get the “money”? Well, they borrow it from the Federal Reserve Bank at almost zero percent interest. And why wouldn’t they? After all, they own the Federal Reserve, why wouldn’t they borrow “money” from themselves at zero interest?

Ok, GS, but you still have not told me where money comes from.

Patience, Grasshopper. You didn’t think the Great and Powerful OZ would make it so obvious; did you?

Well, the Primary Dealers “borrow” the “money” by asking the Federal Reserve to place some zeroes and ones in their reserve accounts. This request constitutes a “loan”. A loan from a Primary Dealer is considered by the Fed to be a “no-risk asset”. So the Federal Reserve places that “no-risk asset” in their “balance sheet” as a deposit and in exchange “loans” the money to the Primary Dealers.

Let me simplify it some more. I know, I know it’s too evil to be true.

The actual “loan” created the “asset” that created the “money”.

So, ok, the Primary Dealers conjured up the money from nowhere, and…? You ask.
The Primary Dealers then use this newly created “money” to purchase the Treasury Notes. In essence, they are loaning the US Government “money” that does not exists!

No way!  

Yes way.

Oh, and that is not the best part. The Primary Dealers now use these Treasury Notes to pay back the loans they took from the Federal Reserve. So how do they benefit? They know that the Federal Reserve is the “Lender of Last Resort”.  It must buy the Treasury Notes at whatever price (or yield) they demand. They also know that the Federal Reserve will buy the notes a few days after the auction. So they can front load the auction and pocket the spread.

So, let me walk you thru it. The Treasury sells these pieces of paper called Treasury Notes to the Primary Dealers in exchange for “money” they created out of thin air. The Primary Dealers sell these notes back to the Federal Reserve at a profit and settle the debt. Yes, they are making a profit from “money” that does not exist!

But wait, there is more! (imitating Billy Mays)

Do you know where the “money” the Bank loaned you for your mortgage came from? The “money” the kind neighborhood banker had you jump thru hoops to get?

Don’t get ahead of me now.

It was created by your signature on the mortgage!

Yup. The moment you signed that document it became a Mortgage Backed Asset (MBS). This MBS is deposited by the bank in their account at the value of your loan and a bank check is issued to you against this asset. They loaned you your money.

And that’s not all (Billy Mays from the great beyond again)

Since banks are only required to keep about 10% of their assets as reserves, they can now issue 90% of the value on your home as credit to others in the form of credit cards. Yes, your money was not only loaned to you, it was loaned to your neighbors, your dentist and your dog groomer!
And the best part, they are charging interest to ALL OF YOU. On your “money”. “Money” created on your credit. Based on a currency backed by your future production.

Is good to be the King

There is no spoon

12 comments:

  1. I have been trying to tell as many people as possible 'not to build your plans for the future on what you learnt from the last 20 years. The system has changed and those who will survive are those who adapt first.' But i have found that is something that is much easier to say than it is to put in practice. I am australian with 2 mortgages and looking at the properties heading under water for the first time, ive been in them for years and have progressively been trying to get out for some time but never really took the steps to make sure they sold - more like just had them sitting on the market with a reasonable (historically speaking) price attached while the market has trended down.

    Now i am faced with buckling in and paying off something underwater from a system i didn't understand when i took the loans out (im 33 now) or chucking it in and moving on. As australia doesn't have 'jingle mail' laws i would likely have to declare bankruptcy through the process and due to my professional accounting qualifications will lose my certification.

    I know the system is full of lies now, but that is a more recent realisation for me. I am faced with difficult decisions and in some way i regret working to join a professional organisation that prohibits the one key defence people have against our system of financial predation.

    If only i knew back then what i know now!

    ReplyDelete
  2. Robert, your cognitive dissonance goes deeper than that. You are examining the symptoms but not the causes.
    You are seeing an artificiality been built around you by TPTB (Banks, Government an Media) built specifically to make you believe that things are well and on their way to good.
    Simultaneously, your mind is telling you that based on reality and logic, this can not be so.
    Welcome to the Matrix. Check you e-mail.

    ReplyDelete
  3. I have read as well that Australia has joined the rest of the Western World with its housing bubble having just burst.

    I hear you that adapting to new conditions is hard. It is, especially if you are being crushed by debt and a broken property bubble. Being underwater on mortgages must be a terrible thing.

    Matt, you do have one thing (even if a small thing) that works to your advantage. You are an accountant, and so you are in a good position to analyze the tough decisions you have to make.

    Good Luck, and Cheers to you, mate!

    ReplyDelete
  4. Hey Robert,
    First, my wife and I had the blinders pulled off about a year and a half ago by reading ZH. I had always been suspect of the MSM but to have it displayed like only ZH does was refreshing.

    We have given up on politics and consider it a useless distraction.

    We have been preparing for the last year and a half and are working diligently to become free of debt. Our plan is to have our non mortgage debt be zero by the end the calendar year and keep making monthlies on the mortgage until we pay it off or JPM/Amerika crash and burn. It's a relatively small mortgage with 7 years remaining so we are not overly concerned.

    We are no longer trying to convince others of what the future holds for society because no one wants to hear the truth. Even my parents (depression babies) still think the government will pull it out in the end. Friends and family look at us as if we have lost our minds. I understand that it is unwise to invest on the end the world but even with the smack down PMs have gotten recently, we are still up about 15% for the last 12 months.

    CogDis is one of my favorite posters and his first essay about cogdis was epic. It explained so much of what I was feeling. So much of the BS is simply BS and not even entertaining anymore. It's become predictable.

    We feel confident in our abilities to make it after the fall and are trying to gather a core group of neighbors, friends and family that are true believers and prepare ourselves to help others when the time comes. That really all we can do. I think we have about 12 to 24 months on the outside before TSHTF. As Turd says, prepare accordingly.

    Good luck and hope things work out in Peru.

    ReplyDelete
  5. Vernon, what a great response. It looks like this article has hit a BUNCH of nerves!

    Preparation is hard. So is ridding yourselves of debt.

    I know two other people who along with me have decided that it is just not worth it anymore trying to warn people that we are in very real danger! So, like you and my cousin and a friends, we do not even try anymore...

    My article on our Peruvian company should be finished tonight.

    Peru has something big happening tomorrow: their run-off election for President of the country. One candidate is not that good (Keiko Fujimori, the daughter of Alberto Fujimori, now rotting in jail in Peru for corruption). She is up vs. the Hugo Chavez clone Ollanta Humala who likely would make things in Peru get worse.

    Peru has been growing very fast in recent years as the various Presidents have loosened up the rules allowing people to seek their fortunes, the country has benefited enormously in recent years. Ollanta Humala may just come and wreck the country like Chavez has done to Venezuela.

    Did not hear that in the MSM about Chavez wrecking oil-rich Venezuela? That's because recent visitors to Venezuela Sean Penn and Iran's own AhmaDinnerJacket are so much smarter than the rest of us in the eyes of our reporters...

    ReplyDelete
  6. Thanks Rob, Australia's property market is definitely tipping over. We have high interest rates which may allow some lee-way but that requires the central bank to want to save borrowers and ultimately, I think the market change has happened and there's no way out of it now. It's no real surprise but its going to be hard decision time soon and I'm interested in how others who have gone before have dealt with it.

    Thankfully I don't live in Australia now and can use my qualifications to get credits on an MBA/Masters, which you don't lose in bankruptcy (although I question the value). So maybe a controlled demolition is in order where I hold on, get in a course and get credits attached, voluntarily give up my qualifications and then enter default and foreclose - from there I will have a clean slate to deal with the financial new world we'll be facing at that point. Either that or I double down and try to earn as much money to get out of debt as possible (if the aussie $ drops that could work out quite well)

    Public thoughts, sorry.

    Great piece Goldsaver, have you heard of the idea that as the bank holds your future promise (which you own) they mis-classify it as an asset as they cannot ever own someone else's future labour and as such component is a liability owed back to the borrower. So the banks are misrepresenting their balance sheet under accounting standards. I have been meaning to look into this in more detail but haven't had the chance yet, as you know the banking process is murky at best!

    Matto

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  7. ^as such the principal component

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  8. Banking in general is evil. I have a friend who is a bank employee. She really has no clue. She is just working within the system as if there was nothing wrong. Sad, really.

    Robert, what will you do if the worst happens and Humalla gets in office? Can you easily move the company to Chile or Costa Rica? Singapore looks promising also. Or are you stuck ( from the frying pan to the fire)

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  9. Rey, please see my article on Ameru Trading del Peru S.A.

    Our company is stuck there!

    My wife and I live here int he USA.

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  10. Great article, Robert.

    Got the material for your next one http://edition.cnn.com/2011/WORLD/americas/06/05/peru.runoff/

    Opine, please!

    ReplyDelete

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