Financial Alchemy and the Seven Fates
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“Finally, after the matter has passed from ashen-colored to white and yellow, you will see the Philosopher’s Stone, our King and Dominator Supreme, issue forth from his glassy sepulcher to mount bed or his throne in his glorified body. . . diaphanous as crystal; compact and most weighty, as easily fusible by fire as resin, as flowing as wax and more so than quicksilver . . . the color of saffron when powdered, but red as rubies when in an integral mass...” – H. KHUNRATH AMPHITHEATRUM
“Alchemy is the art of manipulating life, and consciousness in matter, to help it evolve, or to solve problems of inner disharmonies” – Jean Dubuis
“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem” – JP Getty
Fans of J.K. Rowling’s Harry Potter books will be vaguely familiar with the name Nicolas Flamel, though, unlike the book’s eponymous hero, his wizardly sidekicks and characters such as Professor Dumbledore, Hagrid and, of course, He-Who- Must-Not-Be-Named, Flamel has one rather extraordinary (at least in the context of the stories) distinction: He actually existed.
Flamel’s birth is steeped in confusion, but the later years of his life are well-documented due, in large part, to a book he wrote which was finally published in Paris in 1613, some 200- odd years after his death. The book, Livre des Figures Hieroglypiques or Exposition of the Heiroglyphical Figures contained an introduction that documented Flamel’s search for a legendary substance that contained the most magical of properties including the ability to cure any illness known to man, and to turn base metals into gold through the process of alchemy. The substance—sought fervently by men throughout history, not just Messrs. Potter and Flamel—is known as lapis philosophorum; The Philosopher’s Stone:
(Wikipedia): According to alchemical texts, the philosopher’s stone came in two varieties, prepared by an almost identical method: white (for the purpose of making silver), and red (for the purpose of making gold), the white stone being a less matured version of the red stone. Some ancient and medieval alchemical texts leave clues to the supposed physical appearance of the philosopher’s stone, specifically the red stone. It is often said to be orange (saffron colored) or red when ground to powder. Or in a solid form, an intermediate between red and purple, transparent and glass-like. The weight is spoken of as being heavier than gold, and it is said to be soluble in any liquid, yet incombustible in fire.
The physical properties of the Philosopher’s Stone remain shrouded in mystery and some of the more esoteric descriptions of its appearance throughout the years tend to make it even more so:
(Wikipedia): Alchemical authors sometimes suggest that the stone’s descriptors are metaphorical. It is called a stone, not because it is like a stone. The appearance is expressed geometrically in Michael Maier’s Atalanta Fugiens. “Make of a man and woman a circle; then a quadrangle; out of the this a triangle; make again a circle, and you will have the Stone of the Wise. Thus is made the stone, which thou canst not discover, unless you, through diligence, learn to understand this geometrical teaching.”
Right then. So let me get this straight: we turn a man and a woman into a circle, then a quadrangle, then into some kind of a triangle and finally back into a circle again? Thanks Mike. Your seat in the European Parliament awaits.
Leaving aside whatever the hell Michael Maier was trying to explain to us, the Philosopher’s Stone was long believed to be the key to the mythical process of alchemy; the science of turning base metals into gold.
According to legend, the Philosopher’s Stone is created through the alchemical method known as Magnum Opus (Great Work) and this process is widely-held to consist of a series of four very distinct stages which between them number twelve individual steps (the original 12-step program). These have become known as the Twelve Gates of George Ripley—a famed 15th century alchemist whose twenty-five volume work on the subject contained the Liber Duodecim Portarum, a tome that brought him considerable notoriety.
The means to transform base metal to precious metal that man has searched for since the beginning of recorded time was laid out in simple and concise terms in the progression through George Ripley’s ‘gates’:
- Solution (or Dissolution)
This convoluted process would drive many men to distraction—including amongst them, one Isaac Newton, ‘physicist, mathematician, astronomer, philosopher, theologian and alchemist’ who, as Britain’s Master of the Mint managed alchemy of a slightly lower quality when he moved the Pound Sterling from the silver standard to the gold standard by adjusting the bimetallic relationship between the two.
Newton suffered a nervous breakdown during an extended period of alchemical work which had nevertheless resulted in his producing substantive written research. That written research was later purchased by none other than John Maynard Keynes who, after studying it, proclaimed Newton “…was not the first of the age of reason, he was the last of the magicians”. But I digress. Twelve distinct steps seems an awful lot of work just to turn lead into gold. It’s far easier these days to just turn paper into money which only takes a couple of steps:
Now, I am certain that there are those amongst you who, based on past performance, would, at this point, feel extremely confident in placing a sizeable wager that we are about to go wandering off down a path strewn with references to attempts by central banks to turn paper into gold through the process of alchemy but I am afraid I am going to surprise/disappoint you by taking a turning of a different kind altogether and will concentrate my efforts – believe it or not—on the last of Ripley’s twelve steps; Projection.
Projection, in alchemic terms, was the Coup de grâce, the final step in a long process whereby a small amount of the Philosopher’s Stone would be cast into a molten base metal – most commonly the 82nd element in the periodic table, Lead - and, hey presto, that lowly element would be transmogrified into its near–neighbour just three steps higher in the table; #79; gold.
Projection was the moment when, despite all the work that went into getting to that last point in the program, hope and faith took over as the alchemist found himself having to rely on just a little bit of magic in order to get the outcome he so desperately wished for.
Throughout history, in all the annals of recorded time, every single alchemic projection ever attempted has turned out to be unsuccessful—a track record which gives alchemists only a marginally less-successful record than the Fed, the BoE, the Troika, the EC, the Eurogroup, the US Congressional Budget Office, the combined governments of the UK, Greece, Spain…. I could go on, but we’ve all got things to do so I won’t.
Over the last five years, there have been so many ‘projections’ from the economic and political glitterati that have failed spectacularly as to be almost unbelievable. In fact, as I sat and thought about what to write this week, I struggled to think of a single major projection that hasn’t come in on the bad side of good.
From Chairman Bernanke’s confidently-delivered projection that “subprime is contained” in March 2007, to Mariano Rajoy’s promise upon being elected last November that Spain would “…stop being a problem and instead form part of the solution [to the debt crisis]” the hits have just kept on coming, so today we are going to look at the modern version of alchemy whereby finances are turned to farce and examine a few of the most outrageously poor projections of recent times. If time allows, I will even make a couple of ‘projections’ of my own (thereby setting me up for ridicule at an as-yet-to-be-determined point in the future).
Ladies and gentlemen, in place of The Twelve Gates of George Ripley—and using Greece and Spain as examples—I give you The Seven Fates of Grant Williams, a series of steps that are certain to take place one after another, in sequence, once the primary stage has been initiated:
This is the process whereby ordinary people are given estimates of important economic metrics by impressive-looking politicians who, when delivering said figures, sound confident and assured:
(CNN, September 21, 2011): The Greek government announced budget cuts Wednesday aimed at securing additional aid from its European partners as the debt-stricken nation struggles to dig itself out of a deep hole. Elias Mossialos, a government spokesman, said in a statement that the cuts demonstrate Greece’s commitment to meet its obligations and remain a member of the European Union.
The measures will enable Greece to achieve its budget targets for this year and next, “and allow the full implementation of the support of the Greek economy by 2014,” said Mossialos.
(Bloomberg, November 17, 2012): Spanish Finance Minister Elena Salgado said the economy will grow about 0.8 percent this year, less than the government’s target, and it’s too early to know if the regions will meet their deficit goal this year. The new forecast is below the 1.3 percent government target that Salgado had said since August would be hard to meet, and is in line with the estimate of 0.7 percent published by the European Commission lastweek.
Salgado said that while the central government will meet its budget-deficit target, it’s not clear whether the regional governments will do so, casting doubt on the overall budget- deficit goal of 6 percent of gross domestic product.
“I maintain 6 percent as the priority,” Salgado said in an interview.
Mariano Rajoy of the opposition People’s Party, the favorite to win a majority in the vote, has pledged not to stray from the deficit goal of 4.4 percent of GDP next year “under any circumstances.”
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