I got this from another site and will post it here for those that want to know how this tax and scam plot really works!
How Cap & Trade really works (or, why Climate-Gate is so important)
Okay people, I've tried to push the Climate-Gate thing up into your faces, really hard, and I "get" that most of you don't really understand why
it's so important, and why I'm so bent out of shape on this issue.
So, the purpose of this thread, is to discuss how Cap & Trade really works.
This is going to be a long thread, because it's a complex subject. But it's vitally important for YOU, the American consumer, to understand exactly
what's going on here.
Here's the long and short of it: this is a scheme to take money out of YOUR pocket, and put it into the hands of wealthy investors. This scheme, will
increase the uneven distribution of wealth, making the poor poorer, and the rich richer. And by "rich", I mean the very rich - the people who can
afford to invest a billion dollars all at once, into carbon credit futures.
But to understand how this really works, and what it means for YOU, we have to look at the ground game first, and then work our way up into the carbon
This right here, is the New world Order in action. By the time we're done with this thread, you will be thoroughly convinced, that the New World
Order is real, and that it's not going to do good things for you.
Remember how you were so pissed by the bailouts, and especially when you discovered that GM was taking your bailout money and investing it in Brazil?
And Citibank was using your bailout money to purchase companies in Spain?
Well, this is another version of that. What's happening here, is they're going to try to force you to compete on an equal footing, with people who
are a million times richer and more powerful than you are. And while they're doing that, they're going to drain money out of YOUR pocketbook with
taxes, and put it into the pockets of big power companies in Brazil and India and even China!
No kidding. I'm going to try to be very careful in the development of this thread, to show you exactly how all this works, and why YOU the American
consumer, should be very concerned about it.
How does Climate-Gate fit into this? The evidence from Climate-Gate, is what was used to justify Cap & Trade! That's the evidence that the lobbyists
used, to convince our politicians that this is a good thing!
And it's NOT! And you're about to find out why.
Now, anyone with knowledge in this space, is welcome to participate. But, if you're going to make dumb-ass comments about Obama, please stay out of
it until AFTER you understand how it all works. THEN, you can say whatever nasty things you want to say about the President, our Senators, and the
Congressmen who just passed HR-2454 (that's the Crap & Spade bill), because they all deserve it! !!!
Here's the beginning.
I'd like to spend some time answering the question "how will I get ripped off by this?", but I'm going to generalize it, so we can all see what's
going on here. The answer is not simple, it's quite complex actually.
First, you have to understand how the carbon tax works. Then, once we understand that, we can take a look at carbon credits and how they're
So, let's start here: www.carbontax.org...
This is the Carbon Tax lobby - and this is them, trying to convince you, that the Carbon Tax is a good thing and you ought to vote for it. Note the
headline: a mandatory and ever-increasing carbon tax.
Now, click where it says "Climate Change Legislation: Allowance and Revenue", and you get here:
Now, right away, you know something's up, right? Look at the list of witnesses. Do you see any scientists there? NO!
What you see is, three lobbyists and a government administrator! Correct?
Now - let's look at what these lobbyists have to say: pick one (any one) - how about, Dallas Burtraw? Okay, here he is:
This is his written testimony that he presented to the Senate. And, you can find his video testimony too, it's in the C-SPAN archives. But let's
just focus on this written piece for a minute.
The part he's focusing on, is the allocation of allowances to YOU, the individual, via your power distribution companies (so, that would be Con
Edison, or some such thing, whichever one you have in your area).
The bill he's talking about, is HR-2454, which is the "Cap and Trade" bill. www.govtrack.us...
Here's what he says:
The allocation approach in HR-2454 is complex, but nonetheless leaves the distributional outcome largely undetermined. State public utility
commissions will play the determining role in how households are affected, not Congress, and this will be done in 50 different ways. In fact, there is
great uncertainty about how the allowance value directed to local distribution companies will flow back to consumers.
IN other words, he doesn't really know, "how much" of an impact this will have on you, or "how" it will occur. What he does tell you though, is
that YOU will be allocated a certain credit, via your utility company, and THEY in turn will be allocated credits via the State public utility
Detailed modeling shows that on average, households will be made worse off by the effort to protect them from electricity price changes because it
will lead to greater electricity consumption.
HELLO? "Greater" consumption? I thought the point of this was to reduce consumption? And thereby reducing emissions?
... 56 percent of emissions allowances are directed back to consumers and business to address equity concerns.
Bingo. "Equity concerns". That means YOU have to trade your own credits, if you want any savings! And, why 56%? Why not 100%?
Well, the remainder is in "allowances to industrial- and commercial-class customers" - meaning, big polluters.
See how this works? They're engaging YOU personally in the Ponzi scheme, but they're pitting you up against the sharks! Who do you think is gonna
I mean, you gotta read the whole thing, but you can already kinda see what's going on here, right? What's happening is, that you'll be allocated a
certain number of "credits" (probably based on last year's average power consumption, that's usually how they do it) - and then, if you want to
use MORE power, you'll have to BUY more credits.
But, who do you buy 'em from? Guess what? The big power companies! That's right! The very same ones who are selling you the electricity in the first
place! And, what do you think that means? Well, I can tell you: they're going to charge you more for the excess consumption! Duh.... right?
So, okay, let's call that part 1 of my answer to "how am I being ripped off". This is what I'd call the "ground game". But what we really want
to look at, is the carbon credit market, and how that all works.
See, 'cause what's happening in this scheme, is that OUR power companies end up competing with CHINA's power companies, and they're supposed to be
doing that on an "equal footing" - which means, that YOU the American consumer, are expected to compete on an equal footing with the guy in China
who's making 0.23 cents an hour wage!
Can you begin to see why this ain't such a hot idea? But pal, we've only started. Wait till we get to the good stuff.
So now, I pointed you to a little lobbying piece from the Carbon Tax people.
Carbon Tax, is one of the competitors of Cap & Trade.
There are people who say that the best way to reduce emissions, is to tax the hell out of 'em.
And there are other who say, no... the free market would do a better job.
What we're actually getting, is a mixture of both. The "tax" comes in the form of increased rates for excess energy consumption - based on the CAP
that Congress sets. And, to approximate something like a "fair market for everyone", we have "Trade", which means, that investors in China are on
an equal footing with investors in America.
Overall, how this is supposed to work, is that each COUNTRY is allocated a Cap, and then they're supposed to figure out how to distribute that within
their own country.
But there is also a market, so if one country like China discovers they need more pollution to make their economy work, they can BUY MORE CREDITS on
the open market - and of course, they have to buy 'em from countries with an "excess" of available credits! Right? Sounds simple enough, yes?
But now, let's consider what this will actually do. Read this piece carefully: www.foe.org...
Unfortunately, the federal cap and trade proposals put forth so far would create a system that poses almost identical challenges as those in the
THAT's what I'm talking about.
There's an additional difference, though. A house is a tangible asset. It's kind of like GOLD in that regard - it's an actual substance, something
of real value. "Real" estate, right?
But carbon credits, are vapor-ware. They're like dollar bills. They're NOTHING, they're backed only with someone's promise to pay. In the
derivatives (futures) market, there is something called delivery, which means that you can demand actual delivery of the underlying commodity. Most
people never do that, but when it DOES happen, it can create some problems - especially if the amount invested, is more than the available supply of
the commodity! (Michael had some pieces in the economy section, about how this concept of "delivery" has already wreaked havoc in some of the
commodities markets, and the most important one lately has been the GOLD market, where it was discovered that the things that were being delivered
weren't actually gold - they were FAKE! - they were tungsten bars that were "gold-plated", and no one really found out till after the trades
had been settled and delivery taken).
But anyway, most people don't demand delivery, what they do is, take their profits in cash! Who wants a ton of gold bricks lying around? No one! So,
they just take the cash instead.
All right - so now, let's say we have this huge open market, which is pretty much just like the stock market. You can buy and sell actual credits, or
you can speculate on which country is going to need more or less, and "bet" accordingly, using futures as an instrument. And, you can have "hedge
funds" too - which means, people who buy both actual credits and futures, and hedge one against the other to minimize losses.
So the idea, is kinda like this: let's say we've got a country like China, who needs more credits 'cause they've got a lot of polluting
industries. The people there (the investors), can invest in futures, knowing full well that they're going to need more carbon at some point. This
will tend to set a "fair value" for those futures, based on the equivalent of an "interest rate", which is exactly "how many" new carbon credits
they'll need over how long a period of time.
This trading then, will tend to EQUALIZE THE PRICE OF CARBON CREDITS ACROSS ALL NATIONS. Otherwise, we'd see carbon credits being very valuable in
China, and less valuable in a country without pollution (like, say, Costa Rica). So that's the idea - to equalize the commodities prices via a free
Gotta take another quickie break, I'll keep posting as time permits. It won't take too long to get to the bottom of this, but it's a lot of
information so I hope you're patient.
Okay, but now, let's think about how this works in practice.
Let's use GOLD as an example. One gold futures contract, is worth 100 troy ounces. One ounce of gold, is somewhere north of 1150 bucks right now, so
let's use round numbers and say 1200, just to keep things simple.
So fine - 100 ounces at 1200 bucks a pop, that's 120,000 bucks.
That's how much ONE futures contract costs.
And I ask you: who among you, has 120,000 bucks to invest in the futures market? Anyone?
That's ONE contract, right?
So basically, anyone who doesn't have 120,000 bucks to spare, is locked out of the market side of this equation.
They are forced to participate in the "tax" side though, 'cause there's no other way to get energy! (Unless you're making it yourself, which very
few of us do).
So, who are the people who can invest? Well, they're wealthy investors, but they're also the power companies.
You can already see where this is headed, right? I told you about that little scam Exxon did with their oil futures, where they had THREE times as
much open interest as the hedge formulas said they should have had? Exxon was SPECULATING in their own commodity! Which in turn, drove oil prices up
to 50% over their fair value! AND increased the price of oil futures for everyone else! They made SO much money on that, that they had the single best
financial quarter reported by any company anyplace, anytime in history! !!!
'Kay? Well, so to be fair, there were plenty of people who made money on oil futures, during the BushCo years, and many of them were even YOU. Those
of you who had portions of your 401k invested into oil futures, or oil funds, or even generic hedge funds, probably made some money.
But, what happened next? THE BUBBLE BURST, right?
So, what we have here, is a trivially easy way, for the power companies to create an economic bubble that's SO big, that it affects the entire world
economy. Not just the US economy, but the entire WORLD!
- more coming -
So then, let's run a quickie hypothetical.
Let's say you're an average consumer, but you're fairly wealthy.
So now, your energy cap has run out, and you need more. When you go the power company, they say, "pal, you're over your limit, we're going to have
to charge you more for you excess allocation".
So, you say to yourself, "self, I can offset the cost, by investing in the futures market!" Very good! You're hedging your own energy
So, what you then do, is you create a trading strategy that's designed to net you enough money off your futures investment, to bring the cost of your
excess consumption back to the pre-cap figure.
That, would be a "perfect hedge", right? And, in an optimal world, it would only cost you as much as the commission the broker makes on the trades
coming and going.
But the question is, how does it work in the REAL world?
'Cause in the REAL world, the prices of those futures are set, not by YOUR consumption, but by the aggregate consumption of all the people on the
whole entire planet, relative to the consumption of the people in your COUNTRY, which is where the cap is enforced.
So the market looks like: "American carbon futures" at one price, "Chinese carbon futures" at a different price, and so on. In a way, it's almost
like trading currencies. The Chinese Yuan has a different value from the American Dollar. Right? That's what the market looks like.
So, you say to yourself, "well, gee, maybe I can even make more money, if I know that China's going to need more carbon credits next year - and not
only that, but I can sell 'em some of mine!" So what you do is, you buy American credits now, and sell 'em to the Chinese later! Voila, you've
just become a carbon credit speculator.
But you can't do this, unless you have the 120,000 bucks! Everyone else, is locked out! See what happens? The result for the investor, is that he's
depending on the energy consumption habits of the poor who can't invest, and the result for the poor person, is that his prices are being controlled
by the wealthy speculators!
But wait, you say... that sounds like more of an "equalizing" tendency, right?
WRONG! 'Cause what happens is, that the POWER COMPANIES are also in the equation, and the more power they have to generate, the more those futures
are worth. What that does is, it breaks the feedback loop - it "disconnects" the consumption from the production. Which means, you end up with an
So, what you then need is, some kind of entity like the Federal Reserve, which is able to "equalize the instantaneous fluctuations" by moving large
amounts of the underlying asset from one country to the next. Essentially what you're doing, is keeping the "interest rates stable" by doing
If you don't have this entity, then the situation most closely resembles a country without a central bank! And, if you want to know what that does to
an economy with a fiat currency, all you have to do is look at the history books! Go look at Andrew Jackson's little depression, you'll see exactly
what I'm talking about. Oops....
- more -
All right - well, in spite of Senator Inhofe's assurance that Cap & Trade is dead, I'm going to go ahead with this description anyway, just to show
you what a scam it is.
Okay - now, I said "Federal Reserve Bank", right? Well - let's go back and take a look at the actual bill now.
Here's the summary page from GovTrack - www.govtrack.us...
Here is the Table of Contents page from Thomas - thomas.loc.gov...:h2454:
Here is the Index Page of the bill that was actually passed by the House - thomas.loc.gov...:3:./temp/~c1115pJBRq::
Go to section 725 - Banking and Borrowing
And HERE, is the part that deals with the banking mechanism for carbon credits!
Right at the top of this page, look at section 725-c:
`(A) IN GENERAL- A covered entity may demonstrate compliance under section 722 in a specific calendar year for up to 15 percent of its emissions by
holding emission allowances with a vintage year 1 to 5 years later than that calendar year.
Ha ha - sound familiar? "Raiding the Social Security Trust Fund?
Are you getting mad yet?
Now, if you read through this section, you will note that there is borrowing "with" interest, and borrowing "without" interest.
And, just like the banking system, there is the concept of a Reserve - in this case they call it a "Strategic Reserve", but what it really is, is a
And note further, that the mechanism for allocating the financial piece of this, is an AUCTION - just like the Federal Reserve!
Now, go down to section (g) where it says "Use of Auction Proceeds". Subsection 3 says:
`(3) EMISSION ALLOWANCES- The Administrator shall deposit emission allowances established under paragraph (2) in the strategic reserve, except that,
with respect to any such emission allowances in excess of the amount necessary to fill the strategic reserve to its original size, the Administrator
`(A) except as provided in subparagraph ( B ), assign a vintage year to the emission allowance, which shall be no earlier than the year in which the
allowance is established under paragraph (2), and shall treat such allowances as ones that are not designated for distribution or auction for purposes
of section 782(q) and ®; and
`( B ) to the extent any such allowances cannot be assigned a vintage year because of the limitation in paragraph (4), retire the allowances.
Woah... "the Administrator"? ??? WHO IS THAT?
And "assign" a vintage year - that means, they can use the credits anytime they want, as long as it's not retro-active!
Now, scroll down a little farther, and you'll find this:
`(3) PRICING- When the Administrator acts under this subsection as the agent of an entity in possession of international offset credits, the
Administrator is not obligated to obtain the highest price possible for the international offset credits, and instead shall auction such international
offset credits in the same manner and pursuant to the same rules (except as modified in paragraph (1)) as set forth for auctioning strategic reserve
allowances. Entities requesting that such international offset credits be offered for sale at a strategic reserve auction may not set a minimum
reserve price for their international offset credits that is different than the minimum strategic reserve auction price set pursuant to subsection ©.
Hm... getting a little angry now? The Administrator is NOT obligated to get the best price for what he's selling! Hey man, that sounds just like
those damn energy contracts in California, that almost bankrupted the State!
So, who is this "Administrator"?
Okay, so, we're almost there.
The question was, "who is the Administrator"?
Here (s)he is: Section 2 Definitions, sub-section 1:
Administrator: Administrator of the Environmental Protection Agency.
Ha ha - another Executive Branch administrator!
Who is this person in real life?
Here she is: blog.epa.gov...
And, look at what she's responsible for: www.epa.gov...
Ha ha ha.... right?
But wait - there's another interesting part of this:
What are "energy credits" exactly? They're not money.
The HR-2454 bill as written, says two things:
a ) no part of the energy fund shall be considered Public Money.
b ) no government employee may trade energy credits.
So what they try to do, is SEPARATE the energy economy, from the monetary economy of the United States.
In other words, this is a whole separate economy, and the only place it comes together is in the marketplace.
What does that mean exactly?
Well, you're going to have to peruse the bill pretty carefully to verify what I'm saying, but here's the truth:
This market is entirely unregulated!
At least initially, this market has NO agency like the SEC, to oversee and regulate the trading in carbon futures.
What it does have, though, is an Administrator, whose capacity is basically the same as the Chairman of the Fed!
So, what we have here, is another un-audited Federal Reserve, which has the ability to borrow money from itself against future years!
Ta-da! Mad now? YOU SHOULD BE!
So, imagine what would happen, if the same thing that's happened to the US dollar, also happens to the US energy economy.
On a good day, if everything is running well, this could be a hedge against the dollar, so like, if the dollar is doing poorly, maybe the energy
economy is doing well, and that way, there's some kind of "balancing" in respect to the impact of each on national security.
But if things go the other way, then suddenly we have a big, big problem. Not only will people not loan us any more money, they won't loan us any
more energy either!
And THAT, would put this nation at great risk, would it not?
You BET it would!
- more to come -
Okay - so one question remains, before you can see how YOU PERSONALLY will get ripped off by this whole thing.
The question is: WHERE do the United States energy credits come from?
The answer is: the federal government has to BUY them. With YOUR taxpayer dollars! Yep.
And once they're purchased, they cease to be public money. Yep.
So, they're essentially making your tax dollars "mysteriously disappear", in exchange for which they're graciously going to allow you to purchase
energy at the going market rates.
Sound familiar? Slaughterhouse Cases (nudge nudge wink wink)?
The federal government obtains a monopoly on the commodity in question, and then "leases it back" to the consumer and the people doing business (and
in this case, the big polluters). This is how they "regulate commerce" in this area.
And, here's how the fedgov actually purchases this stuff: thomas.loc.gov...:3:./temp/~c1113qki2q:e78616:
They actually borrow the money to do this (at interest) from the Federal Reserve Bank.
Then they use your tax dollars, to pay back the loan, and the interest!
Sound familiar? It should - this is the SAME thing they do with just about every single piece of federal expenditure. But there's a big difference
with this one - the money in question, actually disappears from the federal coffers, and it goes into a separate account managed by the Administrator
of the EPA.
Shades of Fannie and Freddie? You bet!
- more -
BTW, I just realized that the Thomas cites expire after a while (your tax dollars at work) -
So HERE is a link to the entire text of HR-2454 in pdf form - this is the version that was actually passed by the House.
So then, here's the full cycle on how the money works:
The fedgov, borrows each year's allocation IN CASH from the Fed. (which means, it comes from China, eventually).
Then, the fedgov uses that money to buy the yearly allocation of energy credits from the UN (read: World Bank, IMF).
Then, they pass that out to the States, to the various Public Utility Commissions.
Then the credits get allocated to individual residents, businesses, and ENERGY COMPANIES.
Then, you consume the energy, and pay your electric bill.
The money goes back to the ENERGY COMPANIES, which then pay a TAX back to the States and the fedgov, and that money is then returned to the FEDERAL
COFFERS (because it's cash, not energy).
The net result then, is that the fedgov has INSERTED ITSELF into your energy bill. And, the tax they take out, goes to pay for "operating expenses",
not next year's allocation.
So then next year, they have to borrow more money, and the whole cycle starts over again.
The idea is, that the sum total of the taxes they get from you, plus the taxes they get from the energy companies, is supposed to be enough to pay
back the loan for the intial allocation - WITH INTEREST.
You see what's going on here, right?
Can you say, INFLATION? ???
(Super, where are you, you understand this, right?)
But now, there's still another piece - because in addition to the taxes paying for the energy allocation, they're ALSO supposed to pay for all the
other wonderful stuff in the bill - the energy grid ("Smart Grid"), advanced clean energy research,
Pay particular attention to section 189 - Federal Credit Authority.
And of course there is Section 723 - "Penalty for Non-Compliance".
Title 22 "Energy Refund Program", is the way YOU as a consumer, can actually sell energy back into the system.
Okay, that oughta be enough for starters - is anyone still reading this, and does anyone have comments or questions?
There is still hope. Senator Inhofe says "Cap & Trade is dead", but I think it's just a wish. We'll have to see.
Cap & Trade does essentially two things:
1. It allows the fedgov to borrow STILL MORE MONEY against future allocations. It's exactly like raiding the Social Security trust fund, but on a
much larger scale.
2. Because of carbon credit trading, YOUR tax dollars end up supporting people in China and Brazil!
They're making US pay, for the well-being of the rest of the world. And, we gotta BORROW MONEY to do that.
The globalist world order, is all about reducing the standard of living of the AMERICAN consumer, for the benefit of the BRAZILIAN consumer - and the
Indians, and the Chinese, and the little old Aborigine ladies on the island of Tonga.
And once you understand that, all you gotta do is look around, and you'll see it everywhere - even in the bailouts!
OUR hard work, is being used to fund the underdeveloped countries. NOT a free market - it's WELFARE on a grand scale.
And WE are paying for it.
From the "Cap and Trade is Dead" op-ed:
Internationally, world leaders finally acknowledged that the recession has sapped them of their political power to impose devastating new
carbon-restrictions. China and India are clear they won't join the West in an economic suicide pact. Next month's summit in Copenhagen is a bust.
Instead of producing legally binding agreements, it will be dogged by queries about the legitimacy of the scientists who wrote the reports that form
China and India are the ones who've been told they will benefit from this thing, and they're not buying it!
And Pelousy and Obozo are brushing the whole thing off as if it were meaningless, they're just marching blindly forward.
Cap & Trade, would have cost EACH of you (or your families) an estimated 1761 dollars a year.
Add that to the 1900 a year for healthcare, that's already 3600 a year in new taxes, and that doesn't even include the expiration of the Bush tax
By the time that's all done, you could be looking at 5 grand a year in new taxes! And, if you're making 50k a year, that's 10% of your income, and
even MORE of your disposable income!
And the worst part is, that money isn't even going to We the People - it's going to someone ELSE's people!
Man, what the # are these globalist clowns thinking? (if you can call it that)? Most of those rat-finks are even Americans! I mean, what other motive
can there possibly be, than PROFIT for these clowns? They're using the LAW, to drain money from your pocketbook, and they're going to ENFORCE on you
if you don't pay! That is EXTORTION, plain and simple. And, I don't see "Extortion" in Article I Section 8, do you?