The securitization of a foot treadle.
Everything can be securitized. I like to joke that even a hooker can be securitized. Through actuarials, it can be determined how many apples an apple tree will produce, or how many tricks a hooker can turn, over the next 20 years. You can sell today the apples that will grow next year, or two years from now, or three years from now, if you wish. If you are a grocery store that depends on a steady apple supply, and you are worried the price of apples is going to rise, you can lock in the price of future apples from that tree and protect yourself from the risk of rising prices.
If you own the apple tree, and think the price of apples is going to fall, you can lock in a price now and sell the future apples from the tree and protect yourself from the risk of falling prices.
If the buyer thinks the price is going to rise, and the seller thinks the price is going to fall, one of them is going to be wrong, but both will have a predictable price at which those apples will change hands. Their operating costs and revenues can be more easily managed through this futures market.
A "market maker" can place himself between the farmer and grocer. He can buy apples for a nickel apiece from the farmer and sell the apples for a dime apiece to the grocer. And the apples haven't even grown yet!
The market maker ordinarily serves a useful function. The grocer doesn't have to find a bunch of farmers to sell him apples, and the farmers don't have to find grocers to buy their apples. The market maker acts as the middle man and worries about who to buy and sell from, and he gets his piece of the action as profit.
This is what Goldman Sachs, and their ilk, do for a living. They act as the middleman between commodities sellers and buyers.
However, this places them in a position to manipulate the shit out of commodities. And they do. Goldman Sachs et al. buy up metals and then hoard them, creating artificial shortages. These are the new organized crime families.
So let's talk foot treadles.
Suppose some rice farmer in India is using a bunch of foot treadle pumps to irrigate his rice fields. He's got an army of underlings peddling their asses off every day to get water to his rice. The farmer has decided it would be cheaper and more efficient to start using motorized pumps to get water to his crops.
But the global climate change cabal has determined it would be a bad thing for this darkie to modernize. They see his motorized pumps as adding to the carbon in the atmosphere. And so they offer him a cash incentive to not modernize and stay a primitive.
This means they have to work out how much carbon he would have produced over the next 20 years if he had switched over to mechanical methods, and then work out a price how much that absence of carbon production is worth. They can assign "carbon credits" for every x amount of carbon this farmer agrees not to produce. These credits can then be traded on an exchange.
This future non-production of carbon can be securitized and sold to investors by Goldman Sachs! A factory that made too much carbon can buy some foot treadle credits to "offset" their overages.
But here's the thing. One day, a couple years from now, the farmer decides, "**** it, man. I'm tired of dealing with all these underlings who are peddling their asses off and griping at me all the time. I'm going to switch to motors, carbon traders be damned."
Now those carbon credits for future foot treadle carbon credits just went up in a puff of smoke, literally. Those credits are out there, already sold and being traded. But they are credits against foot treadles which no longer exist.
And this is where the system implodes. And you can be sure Goldman Sachs will keep trading those bogus credits with the full knowledge they are fraudulent, just as they sold toxic securities during the lead-up to the subprime crash.
