When former Assistant Secretary of Housing and Urban Development Catherine Austin Fitts was here for a visit, she, my co-author Dr Scott de Hart, and I had, as I've mentioned before, a wide-ranging discussion of about ten hours ranging on a whole host of current events, financial shifts, and geopolitics. Among Secretary Fitts' concerns was the need to move from debt to equity-based financing, at a localized level, and "crowd financing."
Well, earlier this week I received an email from her, containing a link to this article, which is worth your consideration:
What interests me here is the apparent easing, and further foretold easing, of crowd-funding financing, i.e., the ability of small investors to participate directly in the funding of start-up ventures:
"As of yet, startups are restricted to angel investors. They cannot “crowdfund” from non-millionaires, as allowed under the JOBS Act, because the SEC has not yet issued rules around crowdfunding. But such rules are expected within the next year, and in the meantime, longtime finance wags have taken note of the quantum leap in transparency that allowing general solicitation will enable. As Reuters’ Felix Salmon has noted, the rule should bring online details of even infamously opaque hedge funds, allowing for comparison shopping of the sort that was unthinkable just a year ago. And as Fortune’s Dan Primack has written, a robust, fast, and transparent funding machine/market would let entrepreneurs focus on running their business rather than marketing themselves to investors in the old fashioned, face to face manner.
"By excluding any substantial new regulatory curbs to thwart investor exploitation — some have been drafted but remain unapproved — the SEC’s new rules leave consumers vulnerable to shady operators in boiler rooms selling bad investments online and over the phone, as commissioner Luis Aguilar, the lone dissenter, has eloquently said. But the promise of slowly unwinding the old boys’ club of startup venture capital, of coming up with a more open, dispersed, and diverse funding network for entrepreneurs, is mammoth enough to overshadow those risks. Via the JOBS Act and this week’s SEC ruling, the government has set in motion the ad hoc construction of a vast venture capital machine. It will be a scary beast, but one quite likely fairer and faster than the flesh and bones system that preceded it." (Emphases added)
Now my question is this: "Why would the government be interested in an 'ad hoc construction of a vast venture capital machine?'" A machine that, as the article and the quotations above make clear, is not without its risks, but obviously, not without its potential rewards. But again, the question remains, why?
I strongly suspect that the reasons are highly geopolitical, perhaps even "cosmo-political" (to avoid that badly tainted word "exo-political"). Leaving the "cosmo-political" reasons to my forthcoming book Covert Wars and the Clash of Civilizations, we turn to the purely geopolitical aspects of some high octane speculation.
To put it succinctly, I suspect that the quick moves by the Anglo-American globaloneyists toward a unipolar Anglo-American global order, in the wake of the Soviet Union's collapse, have been stymied on a number of fronts. The nuclear hysteria over Iran led nowhere, the growing evidence of criminality from the Syrian rebels are making the case for intervention there - always dubious to begin with - even more so. And finally, the pushback from the BRICSA nations (Brazil, Russia, India, China, South Africa) on a number of fronts has meant, in my opinion, that a retrenchment is called for.
But the "Empire of America, Inc." is badly overextended. It's hard to have an empire when everyone else seems to be doing the manufacturing. It's hard to have an imperial economy and a service economy at the same time. So I suspect that this move by the SEC is a carefully calculated move, one made not only for economic reasons, but for geopolitical ones: the basis of Anglo-American oligarchical power - North America - simply has to be beefed up; manufacturing must be returned, and a restoration of technological development and infrastructure is badly needed; and a measure is needed to jump start not only a recovery, but rather, a kind of second industrial revolution, one that will not be funding railroads but maglevs, not just electrification but a complete remake of the energy grid(with some new technologies, less subject to centralization and interdiction), three-d printing. And for all of that you need a "vast venture capital machine," one that is accessible to the small investor.
And that means of course, that "the powers that be" are not really concerned about helping small business or the middle class; it simply means they are in a hurry, and need vast amounts of cash in a hurry. Nothing wrong with that in and of itself, but it is a factor to bear in mind.
But the bottom line remains the same: (1) they are retrenching, (2) they mean a sweeping transformation of their power base, both in manufacturing, infrastructure, (3) less "interdictionable" and more decentralized manufacturing, and (4) manufacturing that is flexible enough to produce a variety of high-tech products.
And that's just the geopolitics folks...
See you on the flip side.
(A final word: My thanks to Mr. P.T. for suggesting to me the term "cosmo-politics", a term meant to avoid the nuttery often associated with "exo-politics.")