The Rumplestiltskin
By Gordon Philips, Director of Trading and Research
Institute of Higher Earning
Truth often proves stranger than fiction.
In a fairy tale long ago, the imp Rumplestiltskin is said to have taught a
farmer's daughter how to weave straw into gold. In a modern fairy tale
bearing similar memes, gnomes at the Federal Reserve System perform similar
magic.
First they feed rag linen paper into a printing press. Some ink is applied,
an integer is fixed in each corner and the likeness of a deceased notable is
displayed squarely in the middle.
Then, in the final and most secretly guarded step in this nation-building
necromancy, these monetary alchemists invoke the Mandrake Mechanism. They
gather in a cricle and intone the magic word -- "inflation" -- and presto!,
a fresh 'dollar' of 'money' is created.
A mesmerized nation is then flooded with this paper which has been conjured
out of thin air, born into debt, backed by nothing and containing no more
intrinsic value than a grocery coupon.
Each new dollar thus monetized and placed into circulation reduces the value
of those trillions already circulating. An uninformed public, conditioned to
accept the inevitability of this process as 'inflation' and never for a
moment suspecting the magically meretricious nature of it all, willingly
accepts and exchanges the official looking fiat coupons with each other,
while lamenting the continuing decline in their standard of living.
Taking this magical process a step further, we will now digitize the paper
dollar, pair it against the paper currency of another nation in what is
called foreign exchange (Forex), and create a virtual tug-of-war as
micro-fluctuations in the relative value between the two derivatives is
monitored in real-time on our computer screen.
We will call each tick of imaginary screen territory thus captured a 'pip'
and assign a profit value to each. The more pips we accumulate, the more
profits with which to control and accumulate still more pips.
The process has the potential to escalate exponentially, much like
Rumplestiltskin's protegé who flooded the weaving room with gold.
What have we done thus far? In two successive generations of violating the
TANSTAAFL principle, we have gone from fiat coupons to ephemeral blips, each
stage existing solely in the ideasphere as a mere perception of worth, yet
each equally devoid of anything tangible.
Now we set out to reverse the process and vindicate the alchemists.
We start by trading the sparring currencies successfully on the Forex market
and like picking tulips in a garden, gather pips by the basketful.
Pips morph back into electronic dollars and accumulate in our trading
account as profits.
It is now a simple matter of transferring our profits electronically to our
online checking account. We then head to a nearby ATM where said profits are
dispensed through a slit in the wall, now reincarnated back into 'cash'.
Finally, we take the cash coupons to a precious metals dealer and exchange
them for real, physical gold.
From fable through finagle to jingle, we have proven the fairy tale true.
You really can spin straw into gold after all.
Learn to trade in the Forex and you too can be a monetary alchemist.
