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61  Economy / Economics / Re: Banning Usury will promote cryptocurrencies on: January 22, 2017, 08:19:46 PM
"I dont know how banning usury will promote crypto currencies because usury is a financial option and crypto currency is a trading option.They are not inter related to each other."

I have two answers to your concern. The first derives from Gresham's Law, and my
observation that Nations have been for some time in a competitive devaluation, a race
to the bottom, an attempt to weaken their currency, in effect to counterfeit their money.
In a market where no-one knows the fair value of a good, the price of the good falls.
There are other matters relating to the expansion of the money supply, but leave that
aside for now. Banning usury will strengthen fiat currencies, hence reducing their
competitive advantage against cryptocurrencies. The exact mechanism is open to debate.
It will move the balance of power from the banks toward the common people.

The second answer is that prior to a ban on Usury there would have to be a process
of education for the general public explaing precisely how fiat currencies and the
credit mechanism weaken the financial power of the common man. Despite all the turmoil
of the recent decade, some seem woefully illiterate in matters financial.

I may have misread your intent, but you seem to equate fiat currency and Usury in the
above quote. Also, you seem to have entirely missed my point that global growth is
no longer assured. 
62  Economy / Economics / Re: Banning Usury will promote cryptocurrencies on: January 21, 2017, 09:57:24 PM
"Oh, Shit" said the King, and ten thousand arseholes heaved in the noonday sun,
for in those days the King's word was law, and the King ruled with an iron hand"
from, allegedly,  "The Night of the King's Castration" - anonymous authors.

If some recent data is correct, approximately 7 Billion bums are in danger of sunburn,
because this moment marks the beginning of the end of the Industrial Age, and sooner or
later, the world will be crapping itself.
"Measuring productivity is far from easy; it tends to be the residual left over when all other factors have been accounted for. The OECD says it "can often be a measure of our ignorance". Still, the attached table is very striking. It comes from the US Conference Board (here's the link, with thanks to Gervais Williams of Miton and Andrew Lees of Macrostrategy Partnership for drawing it to my attention). And it shows that, at the global level, total factor productivity fell last year, was flat the two years before, and has barely budged since 2007. Before the crisis, it was growing at 0.9% a year."

I'll begin by thanking Coincube for the link to "Sacred Economics". I'd met Charles Eisenstein
briefly some years ago, before I had got a grasp of the numbers driving economics, so while
his thoughts on living in a world without money were interesting, I couldn't see his
philosophy surviving the wider community's onslaught. That vein of thought continues through
his arguments in that book for and against Usury, though very much biased toward doing right by
others and being able to assess the ultimate benefits to communities of any action. In some
ways it's Adam Smith's "Invisible Hand" but without the individual profit motive and with
limited competition.

We play games with winners and losers; we compete; in most cases we intuitively understand
the rules of the game. Hence when we play Monopoly, everyone knows here will be one
winner and many losers. We also understand that at the end of the game, when the winner is
declared, that the board folds, and together with the pieces, goes back into the box.
Nobody expects that the price of losing could be vital organs like kidneys, a liver, or
a heart.

Why should it be different in real life? Why participate in a system that creates unpayable
debt via Usury? Despite claims by some prominent Economists that our "debts don't matter",
any internet search for "India kidney Debt" will produce returns like this:
"According to Vijay Kumar, an employee working in Rentachintala milk chilling centre, there are at least seven other farmers who have been paid a few thousand rupees for "donating" their kidneys in Hyderabad. The reason for this alarming situation, Vijay said, is the big kidney sale racket that surfaced in the Palnad area between 1998 and 2000. The Palnad area, comprising Macherla, Kambhampadu, Rentachintala, Dachepalli and Piduguralla blocks, has mostly rain-fed cultivation. It is dominated by big farmers who lease out their land to landless farmers."

The consequences of unpayable debt are not always so extreme.
"Shares in Volkswagen were nearly halved on Wednesday after the controlling shareholder, Porsche, took steps to ease a squeeze on short sellers that more than quadrupled the stock in days.

Porsche itself had prompted the meteoric rise in VW stock with its announcement on Sunday that it had effective control of 74.1% of VW, leaving less than 6 percent in the market.

"In order to avoid further market distortions and the resulting consequences for those involved," Porsche said, it intends "to settle hedging transactions in the amount of up to 5 percent of the Volkswagen ordinary shares.""

Thus an unpayable debt, a squeezed naked short, became payable though Porsche's
pragmatic decision to take its profits and sell some shares into the market.

"You can't get blood out of a stone/turnip" - Sayings like these, and the need for a fit
and healthy common man to fight wars, have, in the past, limited inhumanity's excesses.
Today, to judge by some of the more lurid posts om the internet, the profit from
harvesting the right cadaver could be over $100,000. Of course, things like Limited
Liability and Bankruptcy Law stand in the way of such excess profits. If it weren't for
these things companies could: grown and sell foods that over a lifetime, destroy organs,
creating a market for transplants; build transplant hospitals, prisons, airports, and
transportation; push the world's most impoverished people into unpayable debt via access
to credit; encourage governments such as that of India to declare fiat paper savings
worthless; make organ donor contracts enforceable in law.

Result : Profits! and Real Economic Growth! and higher GDP! What's not to like?

Well, generally, in the Western World, unpayable debt doesn't get paid, but that's
because Limited Liability and Bankruptcy Law have been grafted onto Usury. The system
still cranks out unpayable debt, and we've learned to live with it, mostly because
the economies have been growing, and inflation raises all the boats, just some more than
others. Banning Usury would reverse the flow of profit from the poor to the already
wealthy. It will not solve all our problems. There's more to this, but space, and time,
is limited.

The link above shows that world growth will probably reverse. I'm adding "probably"
because the world is in a place it's never visited before, a place with no foreseeable
good outcomes and unprecedented uncertainty.  A time when, if you can keep your
head when all around you are losing theirs, you haven't been fully  briefed.
63  Economy / Economics / Re: Economic Devastation on: January 16, 2017, 09:57:01 PM
More thoughts on Kakistocracy, and cycle #6. There may be competition in the
form of a rebirth of religion - Coincube hints at this in his reference to ascesis.
There is no reason that these two could not coexist in some form.

There is a historical precedent: The Roman Empire form 310 - 400 and the rise
of Christianity. The downside is that this was not a good period to be struggling
to survive unless you had a large estate and a private army.

You might say that these sorts of divisions are playing out today in Western
Civilisation. As regards timing, these clashes tend to play out over decades,
so unless your're planting forests or building harbours you may not need
to pay much heed to events. I'll post something more on the USA once I've
had a chance to see the latest figures and assess the real value of CPI.

Investing in your children and your friends is the best investment you could
ever make.

64  Economy / Economics / Re: Economic Devastation on: January 15, 2017, 11:16:20 PM
I really hope you are right on the transition from #cycle5 to #cycle6

The alternative is a descent into kakistocracy. There are already worrying
incidents that occur when individuals are placed above the law as happens
with globalisation. Especially when the individuals are in a position of power
eg police force attached to UN activities, or contractors with similar profiles.

The only defence against such abuses is a free press, and the wide
dissemination of knowledge. I'd guess that's where the next real world war
will be fought.
65  Economy / Economics / Re: Economic Devastation on: January 09, 2017, 09:00:53 PM
"I have explained that we can't exist (the past and future will collapse) if there could exist an absolute truth..."

That right-handedness is not left-handedness?

It may also prove that there is at least one other universe, but that's a different arguement ...
66  Economy / Economics / Re: Martin Armstrong Discussion on: January 09, 2017, 08:56:40 PM
@ Lateralus - Fractional reserve banking. Your earlier post covered quite a bit of ground,
and I won't claim to have the answer to everything economic, but just for the laughs, lets
suppose we are fractional reserve bankers. I'm the Bank of England and I have 1 in gold,
and that means I can lend you 10. You are the Federal Reserve Bank, so if we have :$
parity, you can lend me $100. With that as a reserve .... you can see where this is going.

To have fractional reserve banking, you need to be working on a Gold Standard, or a near
equivalent. That's not how todays banks work. So what constrains bank lending?
Risk. More precisely, Perceived Risk. Which is why I wrote up the thread
"Unlimited Banking and Problem Banking" which got too long, but you may want to skim
through it.

I'm trying to put together something on Banning Usury, but for the moment that solution
looks worse than the problem that needs fixed, so no rush to finish there.

67  Economy / Economics / Re: Economic Totalitarianism on: January 05, 2017, 09:33:06 PM
"It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife."
This is the opening line of "Pride and Prejudice" by Jane Austen, published 1813.

Some years earlier, in 1779 the Smethwick steam engine was designed and brought into
service by James Watt. This event brought a new phase of the Industrial Revolution,
and arguably leading to the progressive reduction in slavery within the British
Empire, and its eventual abolition in 1833.

Thus, unlike the civilisations of the Roman Empire and the Democracy of Athens,
slavery would not have figured prominently in the life of Jane Austen, the slaves
providing the "good fortunes" were a safe distance away in the West Indies and other
colonies, well away from British polite society and the creative cauldron of
its technological advances. 
This veneer of civilisation had gradually been applied beginning three centuries earlier
when tribal clan wars had met with ruthless Tudor efficiency. Prior to that period,
cattle-raiding of one clan by another, or spring campaigns and autumn campaigns by
Norsemen on settled peaceful communities wove a thread of violence through everyday
life. By the early 1800's murder for profit was the business of governments, and if they
went about their business with a cheerful efficiency, it was still constrained by the
recognised rules of warfare. It would be a mistake though, to think that below the
veneer very much has changed.

Today, well, there's nothing quite like computers for improving efficiency. Governments
love them, along with files, hightec weapons and lists. Especially lists. Governments
have lists for everything, and some include people to be murdered. Democracies and
Dictatorships just go about it a little differently. For some background material on
how the USA goes about this see this: "Where is Eric Braverman Day 71"

The problems today are of the real world leaking into everyday western consciousness.
The carefully constructed theme of the bad guys are over there, not over here then begins
to break down. That tends to cause further problems with kill lists, because the killing
comes closer to home, and because the people start thinking for themselves.

Think of a kill list as a pyramid. At the very top are a very few people with the knowledge,
skills, resources and opportunities to directly damage the top politicians and civil
servants. Further down are many more people with lesser skills, resources and motivation. 
Broadening and deepening the base transfers exponentially more people onto the kill list.

Most people, consciously or unconsciously have trained themselves to avoid actions that
might get their identity moved closer to a kill list, but sometimes the moral imperatives
are just too great. The real challenge then arises of what do you tell your family and friends
about how the world is run.

Fortunately the world of Jane Austen still persists. Provided that slavery, inequality and
oppression are kept out of sight of everyday western life, our governments are freed
to murder with little consequence. If somebody dies, they probably deserved it and it's a
price worth paying to keep "us" safe. They see no contradiction with "If you have nothing
to hide, you have nothing to fear" and are content to advantage themselves of a single
man with a good fortune without considering how the fortune came into being.

I suspect that world is about to change, and soon. If or when that happens any form
of anonymity will be greatly sought after.

68  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: December 23, 2016, 09:01:11 PM
@BobK - My comment regarding Usury is on the Usury thread. Summary: I have a
problem with the moral implications of Usury.

As for hopes of high prices for bitcoin .....
There are reasons to suppose that bitcoin (and precious metals) cannot
increase much more in price. Higher prices imply excessive amounts of
energy consumption. In a way, it makes sense to lever precious metals, and
things like bitcoin via Fractional Reserve Banking into larger quantities
of circulating currencies. Fractional Reserve Banking limited itself to
a leverage of 10:1 or thereabouts, after suffering bouts of bankruptcies
over the centuries. The present Fiat Money system seems somewhat less inhibited.
69  Economy / Economics / Re: Banning Usury will promote cryptocurrencies on: December 23, 2016, 08:55:33 PM
@Yo - The land of the Underpants Gnomes seems not too distant ...

1. Hyperinflation of, inter alia, the US Dollar, turning the world into Zimbabwe
and Venezuela.

2 ...

3. Profit!!! (Cryptocurrencies to the rescue!)

Step 1 _requires_ the loss of faith in the ability of a government to govern, and
a loss of control the supply of money leading to excess quantities of money in
circulation. There are prior conditions necessary for that to happen. It is also
possible that money flows into banks as interest, while unemployment soars, and
prices fall. Generally speaking governments never lose control, they just impose
mistakes. Following that logic, I see no reason to suppose that hyperinflation
must happen in the western economies anytime soon (even in the Euro area).

Logically, there seems no reason for Central Banks setting interest rates near
zero. The large quantities of debt on their books increase the sensitivity of the
systems to shocks and to any other changes. This increases risk within the system,
hence unless the Central Banks have good reason to believe they can control outcomes,
interest rates should be increasing to compensate depositors for the risks they face.

The problem is that the population at large, and many who post on these boards
are too trusting of banks, politicians, and governments. They promise "growth"
whereas they mean debt expansion providing profit to the few. This can continue
until the pockets of the savers are completely empty and the bankruptcies begin.
70  Economy / Economics / Re: Banning Usury will promote cryptocurrencies on: December 23, 2016, 08:54:37 PM
I  personally don't believe Usury is the problem.  Usury is just the price of credit -- everything having a proper price is OK as long as the market is not manipulated by state power.

The problem is the state power that artificially cheapens credit over the long term, to benefit the elites who issue debt.  When too much debt is issued, whose value is then supported by all kinds of manipulative and deceptive actions like inflating other bubbles and starting military adventures, we have problems.

In a constant-money-supply world, prices would just go down as real wealth accumulates.  Economic growth would be fuelled by credit, on which there would be no limit.  (The key here, again, is that credit be totally market driven -- any state intervention would create distortion and bubbles.)

The Great Fear of deflation that has been pounded into the minds of modern economists only applies to this world of centrally planned money.  Since too much money and credit have been created (from artificial, state-driven demand,) the economy has been distorted.  People have honed their skills and made investments based on the financially (artificially) inflated world that demands a lot of luxury for the rich, etc.  Once the bubbles are so big that market forces wake up and wipe out asset values, this demand disappears immediately and people lose jobs and savings.

Since the constant-money-supply world doesn't have the major man-made distortions to start with, asset value corrections would be minor in their impact and actually healthy for the economy.
@BobK71 - I have a problem with the morality of Usury. Usury can create a situation where
the borrower is unable to ever make good on the debt. Legally, the law is on the side
of the Lender, but that tends to encourage excessive risk taking. This seems wrong
from both a moral (and a technical) point of view.

I reach a diametrically opposed view on credit creation. Credit flows from it's source
to a sink, be that bankruptcy or discharge, and wealth provides the reverse circulation.
If anyone could set up a bank, and or print their own money, this would be less of a
problem because there would be competition to provide loans in various formats, much
like today's altcurrencies. The problem begins with the creation of a legal monopoly
on the printing of money. There seems to be some jumps in your logic where your
intermediate steps need to be validated before your conclusions can be reached. I
suspect your solutions only apply in a very narrow set of prior conditions.

We need to talk more about the constant-money-supply, but let's take one step at a time.
71  Economy / Economics / Re: Banning Usury will promote cryptocurrencies on: December 19, 2016, 10:23:17 PM
@Yo - "Cryptocurrencies will be successful exactly because of usury in the fiat system."

It seems most of history is against you, in that bad money always drives out good money,
and as far as I know, every paper currency has ended in inflation. So, somehow,
cryptocurrency to the rescue?

You have a fair point regarding prohibition. I'll ask you to define exactly you choices to
avoid the present system. Can you pay your taxes with, say, bitcoin?  It seems
prohibition is already in place, I merely suggest a different prohibition to make you
look at the options from a different point of view.
72  Economy / Economics / Banning Usury will promote cryptocurrencies on: December 17, 2016, 09:54:49 PM

Why not ban Usury?

Before attempting to answer the question, I'll lay out a "best case"
for an economy. The USA has the best data, so it's the choice.

If the USA continues its present course, except that spending
on Defence and they somehow manage to keep the present trade balance
then I suggest the following outcomes in ten years time:
Wages and prices will double, there will be a ten percent increase
in population and in real GDP, and the national debt will increase
from $20Tn to 30Tn.

In real terms, defence spending halves, the trade balance halves,
and the US national debt falls by one third. Pensions and entitlements
increase in line with inflation, and employment remains near it's
present level.

While I expect things will turn out worse than that, if you want to
make a case for banning Usury, you'd best think of ways to improve
economic performance, because present economics relies totally on
the ability to charge interest. Bear in mind also, that when you
strip away things like the power to create debt, you may find that
things like GDP are no more substantial than the imaginings of a
collective delusion.

It seems to me that promoting cryptocurrencies, for example Bitcoin,
promotes the idea of a ban on Usury, because it would be difficult to
have one without the other. I'm keen to hear any views on why that
isn't a good idea.
73  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: December 17, 2016, 09:52:40 PM
Albert Einstein - 'We can not solve our problems with the same level of thinking that created them'

You are reading this because, at some time in the recent past, you saw
that Bitcoin might offer a different form of money. Since then, very little thought
seems to have been given to raising the level of thinking about money in general
and Bitcoin in particular. One topic should have seen serious scrutiny is Usury.
More precisely, the examination of consequences flowing from a legal ban on the
charging of interest on debt.

Think about GDP. Perhaps half of GDP is ethereal. Leave aside Arts and Entertainment
and over 40 percent of GDP is provided by the FIRE and related services sector in
the USA. This is the business of moving money from one pocket to another and
skimming a percentage. Bitcoin has already begun to shrink that world. If in
addition Usury was banned, I'll suggest that the FIRE sector would shrink to
one fifth of its present size. This end of Welfare for the already Wealthy would
deliver a serious hit to GDP.

What are the other consequences of banning Usury? Well, for one thing, the banks
would lose the power to create money. That bears some further explanation. Banks
would no longer be able to avoid the consequences of their actions. Creating
money creates inflation, and inflation dilutes the mistakes of the past while
making debt taxable. Without inflation and without the ability to lend money at
interest, banks are no longer banks in the sense that we know them. They can still
charge fees, but the balance of power has moved in favour of the common man,
of decentralisation, of smaller banks.

Without the ability to charge interest, it would be impossible to impose a
digital currency on a Nation such as that proposed for India. The hidden tax
imposed by interest would not be available to pay for increased cost of the
Infrastructure and Complexity needed to support the change. Which is why if
Usury ever becomes a mainstream issue you should expect a storm of protest from
the politicians in concert with the banks.

But aren't interest rates useful? Yes they are, as the expressed time preference
for money, interest rates direct investment from those best able to pay to the
investments offering the greatest reward, without much intervention. However,
if nothing else, 2008 highlighted the ability of the present system to get
things wrong. That system will not be fixed by repeating the same mistakes
on a larger scale.

There is another related issue, something more in common with Bitcoin than
the vagaries of a system with inflation. Suppose the money supply is fixed,
as it was for ancient economies based on precious metals. Suppose productivity
doubles, and the quantity of goods produced and consumed mimics that increase.
All else being equal, the price of goods should fall, but there would be no
change to GDP, despite everyone being relatively wealthier. The effect on
unemployment is indeterminate because the effects of international trade
are not predictable. Wages are "sticky", hence the benefits of improved
productivity will accrue to waged employees, instead of to the capitalist.

But I'm getting off topic, I'll post more on a new thread.

BTW, with November's US figures showing a slowing in US weekly earnings
growth YoY from 2.5% (October) to 2.2% (November), it looks like my
targets for 2017 US wage growth and US inflation are too high. But these
are preliminary figures, so I'll wait for December's figures in
mid-January before deciding that a trend has reversed.
74  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: December 10, 2016, 08:55:21 PM
2007. The thought crossed my mind, IANAL, that a load of the criminality such
as that involved in banking, has a ten-year sell-by date. So maybe next
year Mr Sugarman is free and clear to tell more and be more specific about
the things that got him fired, without it coming back to bite him.

Similar dates for Lehman Brothers and for WAMU, AIG, et al, cannot be too far
off in the future, so maybe a quick tour to refresh the old grey cells might
be timely. It's big, so, I'll condense it around Lehman Brothers.

Lehman priced real estate bets on the assumption of a five percent rise each and
every year. Not a problem if everyone else does the same, and nobody figures
out that the risks are way above what they should be. Similarly, the law is
written to ensure that when bankruptcy happens, creditors are made good and
equity at worst, gets wiped out. But when you have $600Bn+ of debt and $40Bn+ of
equity, margins of error are kinda slim, and repoin' ridiculous amounts (~$50Bn)
doesn't help, resulting in a leverage of just under 30. They might have got
away with it in different circumstances, but that's not the way things fell.

When bankruptcy happens, the governments gets first bite followed by the senior
debt holders. Stuff get sold off, usually at the worst possible time, and
in Lehman's case, some went for as little as eight cents on the dollar vs book.
When billions are involved, that's a huge haircut. The buyers, including
RBS and JP Morgan, didn't immediately show a huge profit, so there's another
story there. When the smoke and mirrors were cleared away, there were a
pile of claims totalling $300+Bn, and much less than $100Bn on paper to make
the creditors and equity good. [1]
Around that time questions were asked.
About where the ~$250Bn went? ... Noooo.
"Where did it all go wrong" and some time and more money later "Don't Know" in
about 900 pages. America has  a strange financial system. According to
Mr Corzine money gets "vaporized". Shades of Mr Krugman's Aliens. Maybe he
hopes "Mars Attacks" .... ZAP .... VaporiZed!!! happens all the time to debt
in the USA, it's only we aliens (foreigners) take any notice of such mundane matters. 
This is, of course sarcasm, as evidenced by what happens when "their"
money might be at risk.[2] [3]

Ten years on, is it "fixed"? - no.
Is it better or worse? - it is worse, the debt and the US banks are bigger.

That's enough for now.

[1] By way of example, see Deutsche Bank AG's claim 27141 against Lehman Brothers
for $2,494,729,944.42, one of several claims by Deutsche Bank. Almost all of these
outstanding monies in unsecured loans were owed to financial entities. The latest
payout on unsecured claims brings their total to something like one quarter of
face value. Exogenous money has a quaint habit of returning whence it came.
[2] WAMU Opinion 7 January 2011 p57 "The Plan Supporters argue that even
collection against JPMC [JPMorganChase] for claims the debtors have against
it is not assured." The Judge agreed "... bank deposits (especially in the
amount of $4 billion) may not be easily collectible without resulting in another
bank collapse."
[3] Leniency seems to be a one-way street.
"By 2015, OneWest had foreclosed on 36,000 homes, according to a nonprofit
called the California Reinvestment Coalition (CRC), which tracked the bank's
75  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: December 03, 2016, 08:05:34 PM

The Banking scandal rises again in Ireland, and in the EU Parliament.
For some, it's the gift that keeps on giving.

Banking whistleblowers get to tell their story:

And questions are asked :
"In 2007 you were governor of Banca d'Italia~Unicredti the biggest bank on your watch: Can you please confirm whether you were informed by the Central Bank of Ireland of the multi-billion Euro breaches at UniCredit Dublin?  If so, can you explain why the bank has never been sanctioned for those breaches of 2007."

reported here:

Mr Sugarman's book provides plenty of supporting detail on the trail
of destruction left by largely German but also Italian and Irish banking:

Some additional background can be gained by reading earlier posts in this
thread. You might also want to google "noonan+bomb+dublin" to expand on the
finer points of financial terrorism. Or a gentler form promoted by
Mr Geithner in his intervention regarding bailouts.

You might conclude that if entities outside Ireland have the ability to
direct the policy of the Irish government by threats, they will have the
ability to decide everything else the country does.

Given current Irish reaction to Brexit, one could be forgiven for thinking
that the average Irish EU citizen has a shorter attention span than the
average goldfish. The usual response to such thoughts is that it's a free
country, but that seems to be no longer the case.
76  Economy / Economics / Re: Martin Armstrong Discussion on: November 26, 2016, 09:19:40 PM
In reply to a comment upthread, the reason TPTB wanted a Hillary victory was that
if that had happened, the MSM would have "Brahms Lullaby" on a continuous loop.
With Trump, we get "The Ride of the Valkyrie", and the last thing TPTB want is a
population capable of critical thinking. That said, with only two candidates getting
95% of the vote, the situation is contained.

I believe the phrase is "This isn't their first rodeo".
77  Economy / Economics / Re: Economic Totalitarianism on: November 26, 2016, 09:10:44 PM
Some notes on the Social Contract, and our present condition.

I'm going to begin with something of a workaround. I'll posit that,
to the extent that God exists, he created an economic system such that
the individual had only to work in his own informed best interests to
create the greatest common good. That allows the Invisible Hand, and
some basic concepts of the Social Contract to coincide.

Some would argue that in practice, this doesn't work, that the mass
of the population gives up the burden of becoming informed and even
thinking for themselves in return for protection and a structured
existence. Put simply, if the economy produces four percent per annum
surplus goods, and two percent goes to the elite and the peasants
share the rest, everybody is, if not happy, perhaps satisfied with
the contract.

Since in theory all citizens in an economy participate equally, it
could be said that the society tolerates theft by the elite up to a
level where it becomes unacceptable.   

This limit of tolerance is somewhat narrower than might be supposed.
Historically, rates between zero and one percent real GDP growth are
much more common than the four percent or greater growth experienced
by most of the people alive today. The rising tide lifts all the boats.

It's reasonable to suppose that our present condition may not last
much longer, but before pursuing that, it's worth thing about where we
are now. We've had perhaps a generation, perhaps more, that has never
seen the need to challenge the established order, and the established
order, the Elite, TPTB, have never been called to account for their

Such an arrangement encourages corruption. Such arrangements encourage
the exclusion of "squeaky clean" candidates for promotion. Corruption,
carried to extreme, and given time, may ultimately produce a kakistocracy.
Once established, such an arrangement may be impossible to remove absent
a revolution.

Accumulation of wealth gradually, over many years increases inequality
in the society. Strategies are devised to conceal or justify the theft,
but a city built on a hill cannot be hid. Those closest to it can be bought
off but the elite will find they cannot buy off enough sectors of society
without causing the fabric of that society to tear, or if they compromise
their income from monopolies of scale and captured legislatures, they fail.

It is tempting to dive into one of the many topics that should immediately
spring to mind. But I have a different question. What happens when the
play changes into a zero-sum game? Or put differently, when the elite
owns everything, who gets to decide what happens?   

That's a rhetorical question, obviously. Asking it merely shows that we
find ourselves in unfamiliar territory. If you doubt this, would you
believe blatant theft from the poorest people on this planet by their
elected government?
78  Economy / Economics / Re: Martin Armstrong Discussion on: November 19, 2016, 08:57:42 PM
Let me begin by a recap on a few things. The Clinton campaign initially targetted
Sanders and Trump. They wanted Trump as the Republican opponent as they expected
that he would be even more disliked than Hillary Clinton. Hence they pushed their
media contacts to give Trump airtime and encouragement. They sucked Sanders in
and ensured that the polling system was rigged to favour Hillary. Thanks to
some insiders and to Wikileaks much of that story is public knowledge.

You might wonder why they thought that selecting a candidate a majority of their
supporters wouldn't vote for was a good idea, but step back a bit from that idea.
Their customers are the people who give them money. And their customers wanted
Hillary. They thought they had enough control to pull it off. When Sanders
conceded and supported Hillary, and when Trump won the Republican nomination
while shredding that Party, confirmation bias kicked in. You know the rest of
that story.

Before I get to the next point, I'll mention that I don't have a dog in this fight.
People sometimes equate racism with fascism. While the two tend to go together,
Fascism is capitalism writ large, Mussolini defined Fascisim as Corporatism. It's
when the Corporate lobby decides who gets to govern and it doesn't care what laws
are passed so long as the profits keep increasing. If you're a neoliberal and want
to know what a fascist looks like, begin by taking a long hard look in the mirror.

That, however, misses my point. In a US election that fielded the two most disliked
contenders in its history, third party candidates were crushed. Further, nobody
seems to think this might be either an issue or indeed a problem. The US does
not hear policies or views on issues out of favour with the main stream media.
Hold that thought.

Currently, the Government of India is in the midst of a crisis brought about by
either malice or by mismanagement of their paper currency, perhaps both. In
India, possession of either gold or bitcoin is probably a good thing. From what
I've read, a subtle shift has taken place, and the Indian Government seems
to have shifted the burden of proof of ownership of assets onto the citizen.
If you can't prove it's yours, it's the Government's and you are a criminal.
It may be unintended, but that seems to be how it is being played.

So what is the systemic risk of owning gold elsewhere? Here I part company with
Jim Rickards. Mr Rickards suggests that the US executive order of 1933 making
gold contraband will not recur. The free market in gold prevents the accumulation
of seniorage, thus any attempt to seize private gold would result in the price of
gold rising rapidly, frustrating the intended goal.

But first, history suggests that TPTB will move their gold to a safe location, as
in 1933, hence that constraint on government action can be discounted. Secondly,
the preponderance of paper gold in the market suggests that the ratio of physical
gold to claims for gold could run close to three figures. That suggests that a
mechanism exists which could be used to suppress the price of physical gold in an
"emergency."I'm not saying that such action will happen, merely that Mr Rickards
is less cynical than I.

I'll mention that Mr Rickards and I agree on one thing. There is financial
asymmetry between western financial markets and Russia. If a cyberwar breaks out
the West has much more to lose than Russia. The same could be said regarding
the next financial crisis.

Much depends on confidence in fiat currencies, and that depends on perceptions.
Those, in turn, are influenced by the main stream media, and recent events have
shown that the press cannot be relied upon to provide fair unbiased reporting.
Which leaves bitcoin as perhaps the last currency standing.
79  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: November 05, 2016, 10:03:30 PM

An Economist tells a joke:
Two economists are walking down a street. They walk past a pile of horse shit.
The first economist says "I'll give you $1,000,000 to put a horse ball between
two bits of orange peel and eat it." The second economist accepts and gets
a cheque for $1,000,000. They walk on and see some dog poo. The second economist
says "I'll give you $1,000,000 to put some dog poo between two bits of orange peel
and eat it." The first economist accepts and gets a cheque for $1,000,000.
The two economists laugh when they realize that their street cleaning has
increased GDP by $2,000,000.

Hillarious. But there's a deeper point here. What has value?

Does prostitution really raise GDP? Drug-dealing? Are these different in the
economy to other activities - hairdressing, for example? or pedicures?
And if these are legitimate in the economic arena, what does that say about
other forms of crime? for example, financial fraud?
Where does the economy draw the line between the IMF's GDP forecasts?
or earnings forecasts?
and a ponzi bubble in swamp land prices in Florida?

Is value nothing more than the net present value of some future event?

Money, "It's all about the Benjamins", was at one time convertible into gold,
( - from corbett report episode292)
though there were more claims to gold than gold in the bank vault. Earlier
still, there was a 1:1 ratio at some time. And the origin of all this?
in ancient Mesopotamia, when barley was money, silver was the unit of account.
One shekel of silver was a claim on one gur of barley or a related measure.,35322.html
It was coded into the law. Serious economics in those days.

Here, today, there may be an equivalence between Value and
Schrodinger's Cat. It's that moment when Investor->Bagholder,
the moment when value may cease to exist. Until that moment
Investor and Bagholder can coexist in someone's consciousness.

But suppose "we" include financial fraud into our calculation of GDP.
And, I'd argue that the banker's promotion of the idea that they
are essential for our survival is the biggest fraud ever
perpetrated on the public, hence there is huge potential there.
What happens when that "value" drops out of existence? That moment
when fraud gets "found out"? Hold off on that thought for a moment.

More fraud Sir? What's not to like? It's GDP growth, that goal
of formation kowtowing. And just the sort of thing that seems sensible
when stock markets rise on bad news. It's the ultimate something
for nothing, it's something for less than nothing. Still ......

"Too much of a good thing can be wonderful." - Mae West

[The above is opinion, not advice, and the underlying mathematics
lacks rigour, but probably good enough for economics work]
80  Economy / Economics / Re: Economic Totalitarianism on: October 15, 2016, 05:38:13 PM
While looking up legislation on internet freedom, I found the following somewhat broad overreach:

PROTECT IP Act of 2011
"(ii) the Internet site - conducts business directed to residents of the United States; and harms holders of United States intellectual property rights."

OK, the bill got squashed, which is a story in itself, but then there's this:
"There are many people who can credibly claim to defend Internet Freedom; Obama officials are not among them - Glenn Greenwald"
"But when ideas are blocked, information deleted, conversations stifled, and people constrained in their choices, the internet is diminished for all of us. What we do today to preserve fundamental freedoms online will have a profound effect on the next generation of users."
"Those are the acts of a government and a State Department seeking to block access to and discussion of evidence of their own wrongdoing and to punish as criminals those who reported it."

The above suggests that absent major political change in the USA, there'll be more of this,
which brings me to the prospects for the US leadership contest.

A couple of days ago there was a news video link between an journalist and what appeared to be
a girl in "Aleppo", pleading for the International Community to no longer idly stand by and do nothing.

At that point, I was reminded of many other victims of recent conflicts, and of Benghazi.
If I've recalled correctly, even a direct line to the second most powerful person on
this planet failed to get any effective action in the midst of the Benghazi firefight.

Everybody makes mistakes, everybody has regrets about things they did or didn't do.
The difference is in recognising the mistake for what it is and in the character growth that happens.
"What difference does it make?" suggests this learning process is not in place for HRC,
and it suggests no understanding of the military mindset. 

If I'm reading the runes correctly, at least some faction of TPTB is rethinking its constituency,
and advocating change, but they may have a problem. It is this : "You're going to Jail"

For that political change to happen, TPTB have to be sure that they aren't going to jail,
and there's no way to ensure that, without a deal. And if anybody gets a deal, everybody
gets a deal.

And if everybody gets a deal, then for the internet, it's the same old, same old ...

BTW, More on the Syrian refugees and the totalitarian-lite profiteering here:
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