Wednesday, July 23, 2008

Windows In The Cave

The Architecture of Sustainability

The Un-Processability Theorem:
"There exists no mind or machine, sufficiently powerful, to process finity and infinity, simultaneously." me

"There exists no mind or machine, sufficiently powerful, to process triads, dyadically."

Except possibly, C.S. Peirce, A. Nicolaidis, and G. Perelman... A continuum of three minds...

"The highest probability, of the highest possibility, is the only possibility of..."

"The ill constituted past, can be computationally processed, into a well constituted future, with Charles Sanders Peirce's triadic universal value relational-logic and math, and a time-scaled incentive guage."

"The subjective and the super-subjective complex, can and does process the objective worlds, into the super-objective simplified complex actions, and not the simple objective axiomatic habits. The objective and the super-objective complex, can and does process the subjective worlds, into the super-subjective simplified complex, but extremely abstract..." Simply stated; "The subjective processes the objective into super-objective actions, best..."

"The highest probability, of the highest impossibility, is the only impossibility of..."

As I emerge, deep from the cave of monadic and dyadic ignorance, into the triadic light, I discover a first of the last, of my life quest for absolute knowledge, and it's been a long and tiring 63 years. So, to start off, why does the entire world of spirit, mathematics, logic, etc., still insist on the impossible oneness, when a triadic continuum universe, is all that's absolutely possible? Just try to divide two, or one, by three, and arrive at an absolutely true answer___It's impossible. If one divides two by three, the answer is 0.6^r to infinity, i.e., the infinite eternal transcendent. If one divides one by three, the answer is 0.3^r to infinity, i.e., the infinite eternal transcendent.(the r stands for recurring). So if it's absolutely impossible to receive an absolutely true answer, although I full well know rational math uses limits, no wonder the world's state of knowledge is in such bad shape. How about we start realizing the infinite eternal continuum is a triadic absolute requirement, and not even a "god" can handle the remaining transcendents of such absolutely true math, and since he's supposed to be the absolute, he's got quite a problem, as is easily explained in this Jain philosophy;

“Some foolish men declare that creator made the world. The doctrine that the world was created is ill advised and should be rejected.

If God created the world, where was he before the creation? If you say he was transcendent then and needed no support, where is he now?

How could God have made this world without any raw material? If you say that he made this first, and then the world, you are faced with an endless regression.

If you declare that this raw material arose naturally you fall into another fallacy, For the whole universe might thus have been its own creator, and have arisen quite naturally.

If God created the world by an act of his own will, without any raw material, then it is just his will and nothing else — and who will believe this silly nonsense?

If he is ever perfect and complete, how could the will to create have arisen in him? If, on the other hand, he is not perfect, he could no more create the universe than a potter could.

If he is form-less, action-less and all-embracing, how could he have created the world? Such a soul, devoid of all morality, would have no desire to create anything.

If he is perfect, he does not strive for the three aims of man, so what advantage would he gain by creating the universe?

If you say that he created to no purpose because it was his nature to do so, then God is pointless. If he created in some kind of sport, it was the sport of a foolish child, leading to trouble.

If he created because of the karma of embodied beings [acquired in a previous creation] He is not the Almighty Lord, but subordinate to something else

If out of love for living beings and need of them he made the world, why did he not take creation wholly blissful free from misfortune?

If he were transcendent he would not create, for he would be free: Nor if involved in transmigration, for then he would not be almighty. Thus the doctrine that the world was created by God makes no sense at all,

And God commits great sin in slaying the children whom he himself created. If you say that he slays only to destroy evil beings, why did he create such beings in the first place?

Good men should combat the believer in divine creation, maddened by an evil doctrine. Know that the world is uncreated, as time itself is, without beginning or end, and is based on the principles, life and rest. Uncreated and indestructible, it endures under the compulsion of its own nature.”

And as to Jain(and don't take me wrong, as I don't agree completely, yet they offer as close as I've found to my views, other than C.S. Peirce) infinity, they also accepted a triadic infinity, with these triads, containing triads, also;

A significant historical contribution of Jaina mathematicians lay in their freeing Indian mathematics from its religious and ritualistic constraints. In particular, their fascination with the enumeration of very large numbers and infinities, led them to classify numbers into three classes: enumerable, innumerable and infinite. Not content with a simple notion of infinity, they went on to define five different types of infinity: the infinite in one direction, the infinite in two directions, the infinite in area, the infinite everywhere, and the infinite perpetually. In addition, Jaina mathematicians devised notations for simple powers (and exponents) of numbers like squares and cubes, which enabled them to define simple algebraic equations (beezganit samikaran). Jaina mathematicians were apparently also the first to use the word shunya (literally void in Sanskrit) to refer to zero. More than a millennium later, their appellation became the English word "zero" after a tortuous journey of translations and transliterations from India to Europe.

Here's another bit of Jain cosmology;

"This Universe is made up of what Jains call the six dravyas or substances which are the basic constituents of reality and are classified as follows:

Jīva "जीव" - The living substances
Jains believe that souls (Jīva) exist as a reality, having a separate existence from the body that houses it. Jīva is characterised by cetana (consciousness) and upayoga (knowledge and perception). Though the soul experiences both birth and death, it is neither really destroyed nor created. Decay and origin refer respectively to the disappearing of one state of soul and appearance of another state, these being merely the modes of the soul.

Ajīva "अजीव" - Non-Living Substances
Pudgala "पुद्गल" - Matter - Matter is classified as solid, liquid, gaseous, energy, fine Karmic materials and extra-fine matter or ultimate particles. Paramānu or ultimate particles are considered the basic building block of all matter. One of the qualities of the Paramānu and Pudgala is that of permanence and indestructibility. It combines and changes its modes but its basic qualities remain the same. According to Jainism, it cannot be created nor destroyed.

Dharma-tattva "धर्म तत्त्व" - Medium of Motion and Adharma-tattva "अधर्म तत्त्व" - Medium of Rest - Also known as Dharmāstikāya "धर्मास्तिकाय" and Adharmāstikāya "अधर्मास्तिकाय", they are unique to Jain thought depicting the principles of motion and rest. They are said to pervade the entire universe. Dharma-tattva and Adharma-tattva are by themselves not motion or rest but mediate motion and rest in other bodies. Without dharmāstikāya motion is not possible and without adharmāstikāya rest is not possible in the universe.

Ākāśa "आकाश" - Space - Space is a substance that accommodates souls, matter, the principle of motion, the principle of rest, and time. It is all-pervading, infinite and made of infinite space-points.

Kāla "काल" - Time - Time is a real entity according to Jainism and all activities, changes or modifications can be achieved only through time. In Jainism, the time is likened to a wheel with twelve spokes divided into descending and ascending halves with six stages, each of immense duration estimated at billions of sagaropama or ocean years. According to Jains, sorrow increases at each progressive descending stage and happiness and bliss increase in each progressive ascending stage.

These are the uncreated existing constituents of the Universe which impart the necessary dynamics to the Universe by interacting with each other. These constituents behave according to the natural laws and their nature without interference from external entities. Dharma or true religion according to Jainism is vatthu sahāvo dhammo "वत्थु सहावो धम्मो" translated as "the intrinsic nature of a substance is its true religion."

Now, is it any wonder people think this world is crazy, when even our best mathematicians, logicians and philosophers can't straighten out the simple triadic realities. They all need to realize the oneness/non-dual, continuum or whatever one wishes to call it, is absolutely eternally impossible, if we wish to have a real universe, to live in, and enjoy. Charles Sanders Peirce's graphs and logic prove all this, but he actually didn't realize it, or he'd have finished his monumental, and grand work. I love his work, for what he did accomplish, but the secret in it is the absolute truth of the infinite eternal triadic continuum, he so obviously exposed, in almost graph one. So, if we study his complete works, thoroughly, maybe we can straighten out this one messed up world...

I support his work, more than anyone, but we gotta give up the foolishness of absolute oneness, absolute "god", and absolute non-duality... The universe is more sensible than this. Here's a note I sent to the head of America's cybernetic society;

"Hi Mr. Louis Kauffman, just finished reading your article, and noticed you may have missed a very important part to your position as President of the Cybernetics Society. If you don't mind, let me expand on what you stated about Peirce's graphs, not mentioning anything about infinity, or infinitesimals. There are many sites by many logicians and mathematicians dealing with Peirce's work, all over the world, and one mentioned an explaination of the transcendence of the graphs. If you had his later graph's information, he mentioned the "sheet assertion". The sheet he worked on was the "continuum", interpreted either infinity, or infinitesimal, according to the graphs viewed. This interpretation allows a complete explaination of all his logic, philosophy, linguistics, quantum mechanics, mathematics of all types, and just about anything happening, in the world, to the present day. I assert on his sheet___Just take the world sheet, and draw one straight line, i.e., ____ this size on a 8 by 11 piece of paper. Let the line equal total finity___absolute fundamental substance. Now draw a line perpendicular through the center of the first line, same length, yet put arrow-heads on. Let this equal absolute motion, and the conservation of absolute motion. Next put arrow heads on first line___matter motion in all directions. Now draw a dotted circle around the line, say twice the size of the line. Let that dotted circle equal our present expanding universe, by drawing expansion arrows on each dot, heading to the outer sheet edges, yet just short arrows. Next draw a 7" circle outside the lines and dotted circle. Let this equal total 10^137 Hawking figured years, expansion and atomic decay of our total finite universe. Now abstractly remove the sheet, which is infinity, i.e., true absolute infinity, minus true absolute infinity = finity. Now put it all in cyclic motion, and you've got Peirce's total universal unified field theory, with real matter, true infinity, infinitesimals, and finiteness, after you replace the abstracted sheet.

A. Nicolaidis, a high energy physicist from Greece, recently published a paper on the, titled Logic and String Theory, based on C.S. Peirce's logic of relations and other ideas. I think he's got it close, and by adding G. Perelman's work, it should be the whole picture.

BTW, the mind processes all information in metaphors(signs), the old Greek name for semiotics of Peirce. He's more important than anyone thus far truly realizes.

a polymath, auto-didactic explorer of nous

Tuesday, July 15, 2008

Obama___Giving Ground Back To Politics And Economics

Incentivization of Laws, and Integration of Belief System’s Actions

Hi Barack, I want to thank you immensely for returning the nation’s people back to earth, with your easily understood ideas, sound knowledge, and good judgment. You are certainly giving ground back to politics and economics, like no-one, in the entire history of the country. But___and this isn’t a reflection on you, as the entire nation is under the spell of its own economic blindness. At the same time, I must warn you___You’re $150 billion infrastructure spending, over ten years, isn’t even enough to brush the nation’s teeth, when compared to the true national security emergency needs, we are sincerely facing. Am I being too up front and arrogant? Yes, I am. But, I’m pretty tired of this nation’s eco-geo-military-political foolishness, over the last 35 years. And, I think I’m old enough for a little arrogance to be excused, so please hear me out…

You will need to learn how to finance trillions of dollars, over that ten year period, to solve the very serious problems we face, not just billions. The bill now leaving the country is already a $1 trillion dollar loss per year, so___We have to finance a trillion per year___now___to cover and recover that trillion deficit per year___before___we squander so much of our national debt capacity, bailing out corrupt and incompetent speculators___Before___We lose our chances of real truly sustainable recovery. This is possible, if properly managed. This is also far more serious, than I’ve presently heard anyone mention, yet many have for years offered solutions, as have I. Below, in the post script section, I have listed some general solutions. Hundreds of others ideas about the same solutions are listed on my two blogs: and and I’m not just listing these blogs for advertisement fame. I sincerely care about the future well-being of my beloved family, and all the families of my entire nation, so please don’t treat me lightly. I am, slightly over-educated, if you know what I mean…

I’d now like to mention a few ideas to allow easier understanding of my own ideas, and others below. I think the easiest is through a concept of mine; Incentivization of Laws, and Integration of Belief System’s Actions. Now, that may sound rather complex, but it’s actually quite easy to use this concept, from the earliest native tribes, to our present predicament. If you just imagine a moving/sliding bar line, that one can move the bar left or right, it’s the only mechanics needed to represent all law incentive systems, and belief system’s actions, as well. Just place the bar in the center of the line, and let it represent early native instinctual experiential memory’s actions of a 50%/50% natural and necessary incentive level of survival. This was a natural balance of man, nature and resources in balance, with his early law systems, of potlatch, that actually punished any excess greed. Now, let’s look at what happens when one moves the incentive bar to the extreme right, increasing incentive to 100%, and we could quite easily see China’s present state of excessive capitalism, where the death penalty on bribery isn’t working, right now. Now, slide it back to about 90% to the right, and one can quite easily see America’s Wall St. position of excessive speculations. Now, slide it back to about 65% to the right, and one can see FDR’s, or your own Main St. incentive position, btw, a quite well regulated market, quite fair to the greater good of all concerned. Now, slide the bar to the left 100% and you’ll see absolute communism, at zero per cent incentive, a very bad and failed Mao system. Now slide it to 90% left and you’ll see the near zero incentive system of Stalin’s failed socialist Russia. All throughout history, this is how law systems, ideologies, and belief systems have moved, and behaved___Laws and incentives pretty much describes all eras of history. So, I think it’s about time to learn the mathematical truth this simple concept and model of systems of law and thought work___wake up___and fix this world___Back to FDR/Keyne’s, new, full Bancor “International Financial Architecture” system. Dr. Paul Davidson and Jane D’Arista are the two main economists you must contact, and enlist on your economic team. They can teach your team how to do the massive, paid-for, financing needed. Then, you will have a true grand strategy, to clobber McCain with…!

Real change is Law Change, and you know this, already. All your fine efforts will be defeated without “International Financial Architecture” law change___First…!!! This change will pay for all your other changes…

Thanks to Obama___Change the world? YES WE CAN…!

Your loyal servant,
Lloyd Gillespie
(a polymath, autodidact, true Keynesian economist)

Plato & Exchange Clearing
Plato - The IFI Question?

"The citizen of the ideal state will require a currency for the purpose of every day expenses; This is practically indispensable for workers of all kinds and for such purposes as the payment of wages to wage earners. To meet these requirements, the citizen will possess a currency which will pass for value among themselves, but will not be accepted outside their own boundaries. But a stock of some currency common to the Hellenic world generally i.e., of international currency, will at all times be kept by the state for military expenditures or official missions abroad such as embassies and for any other necessary purposes of state. If a private citizen has occasion to go abroad, he will make his application to the government and go; and upon his return if he has any foreign currency left over in his possession, he will hand it over to the state receiving in exchange the equivalent in local currency." Plato

Tuesday, December 09, 2003
A Few IFA Proposals - Conventional - Unconventional
by Lloyd

Ah yes, Edward. Quite a problem we seem to be in. Since Edward asked this question, I thought I might stick my head out and see how many chop it off. Somehow, I feel they may not since we are all in such a quandry... "What this means is that the seesaw analogy fails: Europe cannot go up while the US goes down: both need to descend together. So the problem here is architectural (any suggestions Lloyd?):"

As I stated in one of my posts at: MacroMouse and in thorough agreement with you Edward, "We have never been here before." Due to the vast imbalances in global ppp's, wages, debts, trade, wealth, exchange rates, etc., which have evolved since the collapse of the Bretton Woods System in 1971-`73, we face the most serious challenge since, oh who knows when, forever("The Shadow Banking System", updated). So what would I do with the international financial architecture? If enough serious minds are willing to admit something needs to be done, then there are definately several answers.

The goal, of course, is to rebalance the entire global system. How? Well, many forms of external exchange clearing have been put forth since Plato first advocated it, though none overly appeal to me or many others, as suggested - they reduce too much autonomy. Therefore, I suggest several different forms of conventional exchange clearing and several unconventional forms of internal exchange clearing - which allow a higher degree of local autonomy. I see no other way to otherwise rebalance the massively out of balance system. If we had originally, in 1971, rebuilt the then broken system by making balanced floating exchange the law of the land, we wouldn't be here, but we didn't. Just for the record, we could have made a 10% to 20% maximum balance band law the IMF would have been mandated to follow when nation's ppp's drifted out of balance, that they should have been mandated to rebalance, even though we had abandoned the pegged system. A rebalancing framework could have and should have been set up at that time, even if it meant loaning, or using a standby agreement until hostilities ended, the money needed by the U.S. to finish the war, etc. It would have been smarter than destroying the entire system as has nearly happened(Now happening, "Shadow Banking Collapse"). There were many ways to rebuild a workable system at the time, it was just the acrimony over the war that prevented such a wise course. I mention this for background on what now must be done.

I have only recently come across enough information and empirical evolution to possibly offer a few new and different answers. I am no where near ready, but I can set the framework. At the outset, moral hazard must be guarded against most in the workings of any new system. As Alfred Marshall suggested, we could use his "units of production",(units of purchasing power) as a solid standard of a new architecture. I suggest a very large basket[20% of GDP] of commodities, production, goods, and services as the new standard for all nations. This large 20% is required because I further suggest using many forms of derivatives contracts and bond contracts as insurance for the new system of clearing - to satisfy the large financial interests. I suggest this be a minimal, (sliding time scaled law structure), financial computer controlled international clearing architecture - politics removed after implementation. To implement, all capital markets must be either closed[short term] or laws of gradual rebalance must be written into the architecture implementation and evolution. This way all nations can maintain their sovereignty and autonomy more than other already advocated systems. If the laws and computer programs are properly written, the world can evolve over a given timeframe to a new global balance of all thus mentioned markets. Rebalancing is a simple accounting trick if enough financing is forthcoming, to do so. It will take much new IMF(and a temporary national debt expansion, as per Alexander Hamilton, putting our nation on firm financial ground, with the assumption of state debt into the first national debt) financing, but the rebalancing will recreate so much new credit productivity, it will pay itself back over time(just as Hamilton's did) just as the massive public financing of global WWII did.

There is also internal exchange clearing, a non-conventional system, that I have written George Monbiot about. There are several of these variations, also, but for now I will enter my e-mail to George:

Earlier today I came across an article of yours about a meeting, to come up with an alternative to capitalism other than the other failed system - totalitarianism. I'd like to make a suggestion that there is a way to build such an architecture. BTW, you are my favorite author. The system I am talking about is already here, almost but unrecognized, as yet. On the one side we have what I refer to as Minsky's Heinz `57 capitalisms. On the other we have the Heinz `57 totalitarianisms. None of these are satisfactory. Yet, the answer lies somewhere in the middle between the two. BushCo wants to implement an outrageously totally free [for the corporations that is] capitalism. China, on the other hand is moving from totalitarianism toward BushCo's totally free corporate capitalism. If it goes all the way this would be a big mistake, as the perfect mixed market capitalism lies in between.

What I'm talking about here is the world has a chance to help China develop the first perfectly balanced mixed economy of public and private enterprise. I use this example as the developed nations will not yet listen to common sense. Now, I know from reading your books and articles you can easily grasp this. If China were to naturally evolve to a state of 20% public enterprise markets and 80% private enterprise markets we would have a chance to witness something truly amazing in economic history, if properly organized at this % mix. As, at this total market mix the 20% public enterprise market could be used to keep inflation/deflation permanently in check throughout the 80% private enterprise market, thus allowing a fiat money system unlimited potential. I mention this about China as it is the only experiment in the world heading toward and most likely to reach this % threshold. It would be a great loss to the world if we do not recognize this once in earth's lifetime chance to grant the world a new path. E=1/5X is a formula for perfect competition capitalism.

The 20% public enterprise mix must be a total % market organization of all production, goods, and services in order to check inflation/deflation throughout the 80% totally free private enterprise side. A triple entry banking system can be set up to finance. Alfred Marshall, at the turn of the century, mentioned such a similar mix with his units of purchasing power. This is the same thing, so to speak, at a much expanded macro level. If you can actually see this system, which I think you can, you must see the advantages a fiat system would possess when inflation/deflation can be market controlled, it frees the printing press to have free reign to build an unbelievably wealthy, healthy, strong, and viable moral capitalism.

If China were to discover this capitalism key, the rest of the world would be forced to emulate - gladly as debts and taxes would vanish or could be used productively. They most likely will cross the 1/5X threshold sometime in the near future as they are privatizing at a fast rate - almost 50% already. There is no need for them to cross it in disarray as is the case with many of Europe's social democracies and Russia's failed transition. They only need be shown the simple facts. Please dialogue with me to work out the details. The world needs us George.

I wrote three books about this system through the `80's and `90's. Trouble is they are very crude web published material - not enough free time. I am now retired and have the time to finish. My work will be rewritten and republished this winter. My first paper will be 20 to 30 pages long on global credit productivity - a totally new macroeconomic subject.

just a start, I have more,
everyone, dialogue with me,

MacroMouse - IFA

"We need a fixed value monetary system. At the present time, we have none. Under floating exchanges, America is simply a powerful ship on an ocean, with no rudder. Old gold, silver, and other known standards will no longer work. They will not work due to the massive increases in communication's speed, the varied endowments of nations' natural resources, and encrypted international speculative opportunities. Therefore, we need a new system. INTERNAL EXCHANGE CLEARING is such a system. It is an entirely new fixed value enhancing - [production standard] - monetary system, to benefit all humankind."

Friday, July 11, 2008

The Realities of Understanding Capitalist Free-Trade, vs., Communist Controlled Trade, Intents and Practices…

“Perpetual Economic Suzerainty”___The Free-Trade Limit…
“Perpetual Economic Suzerainty”___The Nation to Nation Transactions’ Flows, Until A New Nation Is Crowned___King!
The Self-Arbitrage of Capitalism Into Communism…?

“It‘s all a matter of currency exchange rate laws, and true ppp’s.” me

We need to raise the stage of understanding to higher levels of perception. At present, the highest levels of vision seem to be divided between the special interests of free-traders, and the special interests of controlled traders, with the middle position of universal sustainability and subsidiarity of all, being completely ignored, as it seems not yet, to be clearly defined. The special interests, of both sides, are both worshipping conflicting and unsustainable systems of laws, which have mainly evolved over the last century, whose ideas were developed over many centuries of trial and error. The standards of value, which guide both these diametrically opposed systems, have very different fundamental principles, but are very much identical in total transactions’ results___They both wish to maximize profits, over the greater good, for all their citizens___This is a cruel truth we all must accept, to understand the world’s true law and money dynamics. Capitalism cherishes liberty and a semi-freedom of the people, the sovereignty and security of state, and the general welfare, wealth and protection of its international community. Communism cherishes extreme governmental freedom without freedom of its people, a similar sovereignty and security of a highly protected state, and a very different controlled welfare and rent, yet protection, of its special invested international community.

Let’s look at what makes these two law systems so very different. I think it easiest to understand by a new view and open-eyed perception of recent history. By recent, I mean from 1775-2008. In 1775, America was just a fledgling, fighting for survival, baby nation, yet she had an un-precedented access to free-for-the-taking commodities, land and resources, allowing her to experience the lowest real wages, in all of history, to that point in time. Is it any wonder why she eventually assumed, by perpetual economic and trade suzerainty, financial dominance over the known world, by WW I? At the same time, communism was still just an ideal, in the books of Karl Marx, who had only written “The Communist Manifesto” in the 1850’s, and in the 1870’s he’d penned “Das Capital”. It was not until WW I, that the markets brought any true fruition to Marx’s ideas, and then they remained quite fledgling, for many years, in Russia. China started its long march in the 1920’s, with Mao not achieving communist victory until 1949. She really remained just a fledgling nation until the `70’s and `80’s, when she began to make her presence known, on the greater world stage, but from the `80’s to `08, she’s truly become a dominant force, not only on the world military and political stage, but the economic and trade stage, as well, especially in Africa, as pertains to commodity, other resources and oil extractions. Of course, we are all familiar with the rise of Lenin/Stalin’s super-power state, it’s fall in the `90’s, and its new emergence, as one of the BRIC’s,(Brazil, Russia, India, China), growing very rapidly. I could go into all the intricate law system evolutions of both the capitalist and communist/socialist systems, but I wish to concentrate on the trade and money systems’ laws, and their intricate inter-actions of transactions’ evolutions, over the last 213 years…

Economic law systems’ evolutions have been un-successfully penetrated by all the world’s major historians, economists, systemologists and universologists, to this point in time, yet I intend to develop this higher level of perception and understanding, to clear and simple visions, of new knowledge. There are several old tools, laws and theories I intend to use, and some new ones. First of all is law itself, especially long and short positions’ laws of trade transactions and contracts. Next is the natural law of “perpetual economic suzerainty”, where nations’ laws, and money systems of, short sell themselves, through co.’s/corporate, labor and trade arbitrage, to other nations’ laws, and money systems of. Incentive point theory and facts will be used to clearly see these transactions, in our present world, as well as their clear facts in history, such as the Spanish Empire’s over-acquisition of gold, causing over-incentivization and specie point inflation/deflation and decline, leaving the English Empire in control, by the natural law processes of, over-arbitraged and over-short sold, “perpetual economic suzerainty”. True PPP(purchasing price parity, and not Arrow-Debreau’s black hole of false purchasing power parity, false neutrality of money, and false equilibrium theory, and other monetarist false money theories) and real money reality, will be used to clearly show the comparative dis-advantages of empires’ declines, and true PPP’s will also be used to show other empires’ comparative advantages’ rises, and eventual over-beliefs’ of free-trade comparative advantages’ falls. All the economic history books, especially Dr. Paul Einzig’s, Lord J.M.Keynes’, Dr. Hyman Minsky’s, Dr. Paul Davidson’s, Dr. Paul Krugman’s, Jane D’Arista’s, and Robert Skedelsky’s, the banking history books, and all government documentations, are very clear to the facts backing my words, when today’s, overly glaringly obvious, history of global transactions’ law systems, are clearly transposed onto the English and Spanish Empire’s past history of slowly short-selling themselves to the “American IMF Empire”(and I am aware the IMF didn‘t exist until 1945), of global transactions’ trade and law evolutions, through the systems’ law processes, of the un-intended natural law of “perpetual economic suzerainty”, from the period of 1875 to 1945. Further, the above also pertains, now, to “America’s IMF Empire”, arbitraging, off-shoring, and short selling free-trade and transactions’ law capitalism, to controlled-trade and transactions’ law communism.

The imperial preference laws in play, of Spain and England then, and America now, through the IMF and the “Washington Consensus”, are the major arm and culprit, in the battle of global transactions’ true law systems’ battles, pushing free-trade capitalism into controlled-trade communism, and not what China is doing to us. We are the ones responsible for our own nefarious laws’ and transactions’ realities, of blind irrationalisms and outright self-inflicted currency-trade-market suicide. We threw down the very IFA Bretton Woods I system, China is now punching us in the trade face with, called IFA Bretton Woods II… It’s always been the play between imperial preference laws, and currency law realities, of their true PPP’s, controlled by the true incentives’ points, and the specie points of, held in over-all play by the IFA laws, of all concerned___It’s just the fact that we’ve thrown our IFA away, and freely opened ourselves to outright law and money systems’ manipulations… The Spanish and English Empires’ imperial preference IFA laws over-exploited their satellites self-sustainability, by setting currency and commodities’ prices at low un-fair market rates, first over-benefiting the empires, thus reducing the satellites to the conditions of the “over-development of under-development”, as Andre Gunderfrank has so aptly labeled it. It’s an overly fair assessment, as all history clearly records it, and now, when transposed up to the present, we have the “American IMF Empire” creating the same global conditions, in its satellite nations, of nothing short of the “over-development of under-development”, or over-exploitation of subsidiarity and real and fair sustainability... Well, when nations are exploited to the levels Spain and England practiced, one must realize currencies drop to levels where a common subsidiarity and solidarity develops by the underdogs, to go after the giant who’s been stealing their food and shelter, and that’s just what happened, with America being one of the exploited, by imperial preference laws, and she joined in solidarity and subsidiarity with Spain’s and England’s satellites, to over-take the major empires, as is clear of all historical evidence. The PPP, currency, trade and commodity numbers are all there for everyone to investigate, especially in William Spaulding’s and Dr. Paul Einzig’s currency history books… This is nothing but the ruling empires short-selling, arbitraging, off-shoring and free-trading their empires away, to the satellites, by the over-arching IFA(international financial architectures’) laws of the time, through the natural total transactions’ realities of “perpetual economic suzerainty”(evolution of nation to nation transactions’ power flows), the highest truth and understanding level of perception, of global markets and free-trade transactions, possible___“Perpetual economic suzerainty”___The free-trade limit___if you wish to maintain eco-geo-political sovereignty, subsidiarity and true sustainability...

And finally, we come to the China/America conundrum, of a seeming free-trade, transactions and markets’ capitalism, verses, a known controlled-trade, transactions and markets’ communism, or at the least autocracy, and at the most totalitarianism. Do we want to free-trade capitalism into controlled-trade communism…? This is the heart of the two IFA law systems’ intents and realities COLLISIONS, of the existing systems___Which road? What road…? If we sincerely again transpose the past actions of capitalist nations onto the present capitalist/communist collisions, we clearly see the same identicality of PPP’s, currencies, trade and market transactions taking place, with the added dis-functionality danger, of the highest natural law of “perpetual economic suzerainty”, playing directly into communist China’s hands, yet we, through our imperial preference IMF empire laws, created the very market, trade and transactions, of the “over-development of under-development” taking place, reducing our satellite countries to the PPP, commodity and currency levels, more aligned and beneficial with and to China than ourselves, putting our very national security at stake, our national freedom at stake, and our national economic security, in the hands of the enemy, as China will never turn real power over to democracy, as many falsely believe. They’ve the best of all possible world’s___Absolute power over wealth and security___Why give up power and success to a shared democracy? They see they have the most powerful system of law, to ever share the world stage, and know its true intent and abilities, if they only maintain the autocracy they have. This is why America must internally and externally change course___If not___We become the underdog satellite of communist China, the BRIC’s, and their minions, of other China satellites. The mathematics of “perpetual economic suzerainty” are irreversible through free-trade, as we now know, and have it constructed, which can be described as external un-regulated transactions free-trade and markets___That’s irreversible…? As we know it…but, it is reversible by internal transactions’ law changes, coupled with external law changes of the IFA laws___to avoid the “perpetual economic suzerainty”, of free-trade’s limit, we all by now know, as a devilish black hole, of all the world’s past empire experiences, since it’s actually true, no matter which empire we study, as Dr. Paul Einzig’s anthropology, “Ancient Money”, and “History of Foreign Exchange”, clearly show………………….

What’s your choice? To continue short selling, arbitraging, off-shoring and free-trading capitalism into the black hole of controlled-trade communism, or REAL CHANGE…?

I choose CHANGE…!

Just another short warning to Obama, about America’s NATIONAL SECURITY…

All free-traders should realize high and low currencies are nothing but extreme tariffs and opposite direction trade subsidies, and have been since abandoning any semblance of any real standards of value, truly principled, capitalism, in the `70’s___The death of Bretton Woods I. Free-traders have been screaming for trade barriers to come down, as they’ve really been jacking them with currency bands widening, with their false floating exchange mentality and reality, fostered and furthered by the false “Washington Consensus”, of the academic pin-heads, and the political and economic pin-heads, all thinking and falsely believing, absolutely inane money mechanics’ non-sense, for over 35 years…

We now have the BRIC’s Bretton Woods II system, of superior trade mechanics operations, also known as Mercantilism eating us alive, and we are the seeming helpless, diminishing power Hegemon, as were Spain and England, years past…

This my friends, must change…!

America definitely needs “A Grand Independent Finance and Energy Strategy”___Immediately…!!!

Remember, they’ve got the money, we’ve got the debt___A $9+ trillion national debt, and $1+ trillion leaving the nation for the oil autocracies/dictatorships, and the trade-goods autocracy of China, every year___How long does anyone, truly, think this can last…? We’re free-trading the Eagle’s paper money, into the mouth of a Fierce Fire Breathing Dragon…!!! Last I checked, fire burns paper eagles…

America must realize, “You can only free-trade, until cheap labor, out-trades you.” This is the #1 law of capitalism and free-trade, and China has clearly, out-foxed, and out-traded us. The BRIC’s and Japan, have $3.5 trillion of our hard currencies, while we have the debt of that plus, and they will burry us alive, unless we change course___immediately___I can ADD…!!!

I think it’s high time to awake…America…!

U.S. Busy - China On The Move
The most interesting dynamic in the world is China as a capitalist power, a huge future economic powerhouse. How will America fair in the dynamics of this great competition? Will we awake and rise to the challenges posed, and reform the international financial architecture, as needed, so fair trade can finally start the long journey to rebalance the world's markets? Or, will we play Rip-Van-Winkle too long? I have no idea which choice we will make, but, I do know if nothing is done America Inc. will pass by “perpetual economic suzerainty”[just as England did to America] from our hegemonic power to the hegemonic power of China Inc. Some may say, here, that China has no chance of this, it will go the way of Russia. Well, maybe so, but again, in this case due to the massive amount of global derivative insurance contracts, foreign direct investment, and global treasury instruments invested in or held by China - a controlled capital market, the rest of the world would trip over itself being first to either help or support China in any future serious financial market troubles, as such could bring down the entire house of cards. This would then leave her strong enough to become the example of the first scenario - global eco-political hegemon. I'd say we'd better soon awake from the Great Cold War Snooze.

The Liquidity Conundrum
China, the global wages dynamic and the global resources dynamic - is this all the story or is this a much more complex dynamic? My answer to this is one you may never have thought of. I've recently been involved with many academic and intellectual groups pouring over the world's problems, and mainly from economic perspectives. What has struck me as novel is the fact the U.S. and many western nations preached for the downfall of Marxist philosophy nations for over 75 years, yet never penned hardly a word about what the world would be like if their dream came true - what the economic, ie., wage, inflation and resource dynamics set in play would truly be. By this I mean Marxist nations for all these years had barely any inflation in wages and internal resource prices compared to the western world. Then I got thinking about colonialism and imperialism exerting a very similar economic dynamic in the countries where practiced for centuries - and then them also re-entering the free capitalist system mostly after WWII. Most of the colonial nations didn't experience the rates of inflation their host countries did either, much the same as the Marxist countries, since they were manipulated low - kind of like capitalism's socialist surrogates. This means that a huge, more than huge, economic dynamic has been released on the world, first by the post colonial period after WWII, and then by the post Marxist period since the early `90's.

After thinking about the above I got thinking about what my grandfather had told me about time - ie., empire time and timing of nations' integrations and re-integrations. Looking back over history we all recognize the many great, and not so great empires that have existed. They all existed for a time - time and the timing of empires and nations' existence is key to my thinking. If we boil this down to a basic model of ET=WIR, or empire time equals wages, inflation and resources, I think we can see quite a simple example of otherwise complex data. It matters not which empire or nation we use, as our model, as all work the same to these four factors - time, wages, inflation and resources, since these four items can represent everything present in any and all empires and nations. Nations and empires all started out with cheap wages, low inflation and cheap resources. Time, there it is again, time changes this dynamic and only time does. Now, that may seem quite obvious but, over time any empire or nation, such as the U.S., starting out with practically free for the taking resources, which in itself would have created cheap wages, was a huge dynamic on the then existing capitalist world. Defining this further, we were a mercantilist nation entering the hegemonic capitalist world of the European empires. By us having such cheap wages and resources we couldn't help but accidentally grow into the greatest power and wealth nation the world has ever known, but now we face the same problem from China that we then posed on the capitalist hegemonic world of 1791. We are now the hegemon and China is the mercantilist with the cheap wages and internal resources - not to mention her mercantilist minions all over the globe.

This timing dynamics has been going on since the dawn of economic time. Any one nation or potential empire starts out with the cheapest wages and resources, whether it be Egypt or the Mayan's, and over time inflates to higher levels than the periphery, and at some point the periphery becomes a new center. This happens due to nothing more than the time and timing growths and integrations of wage prices, inflation rates and resource prices. Low price nations and empires become high price nations and empires over time, and thus trade places one after another through the process of “perpetual economic suzerainty” - the never ending cycle of the circle of nations' time cycles. So time and re-timing the global cycles into and by global re-balancing through sliding time scale law structures is the only way this author sees to solving this greatest of history's global problem.

A Note To Paul Krugman

Excellent view of Keynesian thought, Paul. I'd just like to point out something you wrote, but may not have realized its thorough implications. WWII, as you rightly mentioned, was a public works project, but a massive one, and is the most important implied aspect of Keynes' entire manifesto, imho. Expansionary fiscal policy, alone, doesn't cut it. It must be accompanied by public works, in the most dire of times, as the `30's certainly were, and WWII’s recovery, clearly shows, etc., as fiscal stimulus, only, simply goes up the chimney of Wall St. investment and speculation, far too quickly, thus lowering TFP(total factor productivity). It must be spread to Main St., through public infrastructure spending, as Keynes suggested, in the worst of times, to spread and slow the velocity of stimulus mechanics, throughout the entire economy, to truly raise TFP…

As to the deeper analysis of Keynes' great work, his "IFA-international financial architecture", of which you do not mention, in your piece, since it really wasn't in his "General Theory", yet is the central achievement of his thought, must be brought to the front, and thoroughly re-interpreted. I would title such a work, "The General Theory of Massive Currency Tariffs, Massive Currency Credits, and TFP Decline"___What Keynes/Einzig tried to prevent in 1945___Nixon instituted in the 1972 era, and evolved by 2008___to the highest, most nefarious, currency trade tariffs, credits/subsidies and off-shoring incentives, the world has ever known… Skedelsky is quite clear on the importance of Keynes IFA contributions, and further, his yet untried balance of payments "Bancor" system. I think if we were to work through a re-interpretation of these more central mechanics of Keynes' thought, we would be better prepared for what the world may shortly face…

Thanks for your great thinking,
and with due respect,
Lloyd Gillespie
(a polymath, autodidact, true Keynesian economist) Macromouse

Thanks to Obama___Change the world? YES WE CAN…!

Friday, July 4, 2008

Can Obama Save America, From Surrendering Capitalism To Communism…?

“Patriotism is supporting your country all the time, and your government, only when it deserves it.” Mark Twain/Barack Obama
“Know thyself and it will set you free.” Code of Hammurabi
“Know thy-self-state-government, and it will set you free.” me

“How dare you even frame such a question?” “How can anyone speak so crassly about the country we all love?” “Are you a nut-case, or what…?” “You un-patriotic no-good piece of dirt…!” Now these are just some of the comments and abuses, many would likely throw at any author who dared frame such a question, but I ask it in all manner of sound patriotism and honest sincerity, so please hear me out___as I intend to prove the exact insinuations, the title portends... “I’m telling you, I’ll have none of it. I’ll have you censured, banished and forever ostracized from America. You are a disgrace to fine American intelligence…!” Well I do see where such criticisms come from, but they are, imo, coming from a mis-applied over-worship of personal patriotic faiths, and not from the personal patriotic faith I have in our founding fathers, the U.S. Constitution, and the true national security truths, the hard truths, we all must realize. Why would I choose such a provocative title? Why would I wish to infuriate so many readers? This you will have to read, to find out, and I assure you, my feelings are compatible with the yearnings of all past, present, and future generations of kind people, minds and sensitive souls, which I sincerely have in mind, by writing this ominous warning…

Do I believe the title? I certainly do believe that “perpetual economic suzerainty” is pushing aggregate free-market and trade capitalist transactions, to and into, the controlled-market trade and transactions power vacuum of communism.. I absolutely, with mathematical certainty, know it to be what has been taking place, slowly at first, but now quite rapidly, since 1972, with the second election of Richard Nixon, and his damaging choice of IFA, (international financial architecture) destruction, of capitalism’s true and safer path. Not that Nixon did anything evil, on purpose, as I do think he truly believed in his eco-political decisions, at the time, but the un-intended consequences have been almost indescribably self-suicidal. Of course this story started long before Nixon, truly in the FDR New Deal Era, where the Bretton Woods I System and GATT were dreamed up and legally instituted, thereafter. And, to make it fair to both Republicans and Democrats, I should first mention FDR’s major blunder of 1936 or `37, as the true origins of America’s present dilemma started here, with the Roosevelt Administration’s doubling of the gold price, with its unknown or un-thought-of, at the time, un-intended consequences. By FDR’s administration doubling the price of gold, to try and solve some of America’s dire internal financial problems, she actually, ipso-facto, created Chinese Communism’s initial successes. The doubling of gold, with China on a bi-metal standard of gold and silver, speculatively bankrupted our ally Chiang Kai-shek’s money system, and played directly into the rise of Mao’s power, since he was enforcing the value of his paper money, at the point of a sword, and impaling, on bamboo stakes, all who dis-agreed, as Chiang Kai-shek’s system hyper-inflated, then hyper-deflated into collapse and bankruptcy. So, in the end, China’s capitalist system fell to Mao’s communism, with FDR’s hand playing a major card(Chinese eco-history facts, Conant, King and Einzig)___The unintentional joker? You may as well laugh, as cry. History is often cruel, when seen to the bone…

At the end of the war FDR had, so-so, summoned Treasury Secretary Morgenthau to head the Bretton Woods I meetings at Mt. Washington, in New Hampshire, with Harry D. White, to be counter-party to England’s JM Keynes and company. The Bretton Wods I system was eventually set to law and instituted, as the first IFA I since the gold, and gold and silver systems, of the pre and inter-war periods, shortly after war’s end, and shortly after that, GATT was set to law and instituted, as the first round of post war trade treaties. And, from this post war era, until 1972, the world, never in its history, experienced such phenomenal growth and prosperity___All history’s numbers bare out these facts. But from 1972 to 2008, the numbers have been, comparably, rather dismal, as the BIS, World Bank, IMF and hundreds of economic and financial books easily verify, so what has truly gone wrong? Let’s make a list, to more easily see the picture:

1.IFA I, Bretton Woods I 1944-1945
2.GATT 1947-1948
3.China makes first Euro-dollar loan to self 1951
4.Russia makes first Euro-dollar loan to self 1953
5.Ike opens foreign exchanges 1957, closed since 1939
6.Post-Kennedy’s foreign exchange crisis 1968
7.Nixon floats gold, balance of payments crisis 1971
8.Nixon floats paper currencies, thus ending Bretton Woods I 1973
9.First OPEC oil crisis 1973
10.Carter’s inflation 1976-1980
11.Reagan squashes inflation 1981-1982
12.Reagan prints Russia to edge of oblivion 1982-1987
13.Global markets crash 1987
14.America and OECD’s punish Japan currency 1986-1991
15.Japan market crash 1991
16.WTO and NAFTA enacted, Mexico collapse 1995
17.S.E.Asia Tigers crash 1997
18.Russia crashes 1999
19.Argentina crashes 2000
20.World Trade Center, Enron, market crash 2001
21.Afgan War 2001
22.Iraq War 2003
23.Oil crisis 2008
24.IFA II, Bretton Woods II, The BRIC’s, Communism 2000-2008+

That’s enough for a general outline of our more recent history. You’ll have to correct my date errors, as they’re off the top of my head, but will work for what I need to show. #1., the IFA I wasn’t what all parties wanted, but it was the best political consensus possible, so it’s what we got. Did it have flaws? Yes. It’s greatest flaw was not having clearly drawn up “sliding time scale laws”, to ensure its successful life. It also didn’t possess Keynes’ Bancor system, nor his International Exchange Clearing House, as he originally wanted, which would have made it much stronger and more viable. Yet, for these flaws and omissions, it worked fine, but what truly went wrong? If you notice, there are two distinct law systems, that were instituted in the post war period___the IFA I, and the GATT. Under IFA I, GATT worked fine, yet when IFA I was ended by Nixon, GATT worked against the then semi-non-law, or no-currency-balance law system reality, that was left standing, or not standing, as reality would have it. With trade law geared to work with a balanced currency system, to lower trade barriers, a good system by the way, yet the GATT law system, alone, worked directly against the new floating currency system, that resulted from the death of the Bretton Woods I system, thus multiplying world problems and imbalances, the further currencies, and trade balances, traveled apart, finally creating the present global balance of payments imbalances___the present global debt and deficit imbalances, and the terrible currency tariffs, credits and excessive off-shoring incentives, we now see the system filled with. The two systems, from `72 on, were locking in opposing needs, to any successful system, by pushing transactions to a counter productive trade and transactions productivity___a negative TFP(total factor productivity). Yes, the credit and trade system expanded, but at a great cost to many nations, that was never necessary, had the original IFA I been repaired and maintained___History’s global gdp’s(global gross domestic products) and tfp’s(total factor productivities) numbers, clearly show these glaringly obvious facts, along with CHIPS(clearing house international payments system) numbers. If GATT(general agreement on trade and tariffs) had been re-geared to work with the new reality of floating currencies, with proper and fair trade treaties, to rebalance global prices and trade, against unbalanced currencies, the system may have been salvageable, but it did not happen, and the world of global transactions capitalism has been drifting ever closer into global transactions socialism and outright surrender to communist China’s IFA II, ever since… Bretton Woods I could, also, have been saved by Kennedy, Johnson or Nixon, which would have been the best for all concerned, but it did not happen either. A simple guide book of operations, by “sliding time scaled laws”(a percentage change of law, per year or less, to ever changing targets’ ratios of change, i.e., pliable currency laws) could have served this purpose, by simply moving currencies and prices back into balance, as they became imbalanced, and the same applies after the Bretton Woods I end, which could also have “sliding time scale” adjusted the tariffs, and currency tariffs, to rebalance prices, within all nations concerned, but that did not happen either. What we got was the worst of all possible worlds___Extremely imbalanced currencies, and all extremely low currencies, acting as high export tariffs to the high currency value nations, and all the extremely high currencies, acting as export credits to the low currency value nations. Of course, the high currency value nations were also acting as subsidies, to the richest nations, making it easier for the richest to buy the most, the cheapest, and off-shore at will, but only for a time___And now time has most run out…! There’s not much to it, it’s just simple Cassel PPP(purchasing price parity) mathematics___addition and subtraction. I guess the world just can’t ADD…!

So, because the world can’t add, we slowly, accidentally, surrender free-trade and market capitalism to controlled-market and trade communism, through the process of “perpetual economic suzerainty”. #’s 3., 4., and 5., are the origins of the “Shadow Banking System”, later to spawn the massive derivatives(contracts derived from underlying market equities, contracts and transactions___largest % are interest rate contracts for hedging, arbitrage and outright speculation) market. Loosely speaking, originally this was the Euro-dollar system,(no reserves required, thus allowing excessive credit expansion, outside gov., and or central bank oversight) started by the money we loaned our allies, Russia and China during WWII. As China went communist, we tried to freeze her accounts, and as usual, our Senate telegraphed her hearings, over radio, TV, and newsprint, to China, and she lent the money, through the London and European banks, to herself, thus protecting it within the system, and thus, so-so(just trying to tell a short story), forming the London Inter-Bank Market of Euro-dollars___It’s where the modern version of LIBOR(London inter-bank offered rate), so-so, comes from. Russia followed suit, with the same market transactions, a few years after China’s first institution of transactions. From these early beginnings came the tremendously huge Euro-bond market, Euro-dollar market, American derivatives market, and the massive Euro-derivatives market, which all together, more recently acquired the nick-name of “The Shadow Banking System.” This massive global derivatives’ market, according to present BIS(Bank of International Settlements) numbers, has ballooned to some $596 trillion of notional value(trading account-value) of total transactions turnover per year. (There’s only $50 trillion of real global GDP of all world nations.) The nominal value(real underlying trade-cashed value) of these contracts is somewhere between $10 and $15 trillion. Most of the derivatives’ contracts notional values’ transactions, cancel-out much of the values of contracts against contracts, as they are written and traded in over-whelming large denominations of trading values and volumes, to often make only from 1/16th to a ½% on the dollar profit. Others are much more profitable, but are fewer in number, still the speculative constituencies of this “shadow banking system” are astounding, and are greatly contributing to the world’s financial problems, at present, as the markets are clearly showing, as openly reported on CNBC… Along the way the Japanese “Zai-Tech”(financial engineering) also played a heavy hand in expanding this market, by lengthening the forward exchange market’s forward contracts, and later derivatives contracts, greatly expanding global financing, and the not-so-welcome other side of excessive speculations. It’s the most complex market the world has ever known, but basically works as any market___it’s all just long and short transactions’ trades___money’s made both up and down, in all markets, these markets are no exception___It’s just the way it is. That’s capitalism, and it’s operated similarly since the Egyptians and early Greeks, with their forward letters of credit, yet in a much more scaled down transactions market, back then.

#’s 5., 6., 7., and 8., are the eras of the first major cracks showing in the Bretton Woods I System. When Eisenhower re-opened the foreign exchanges in 1957, he made a huge unintended mistake of not dealing with the fledgling Chinese and Russian Euro-dollar and Euro-bond markets, first. The markets should never have been opened, in a true financial eco-military defense sense, until the Chinese/Russian dollar problem was solved, because this is the next beginning of America accidentally playing into communist hands, as had FDR, mistakenly done in the `30’s. By Ike opening the foreign exchange market, this allowed the two communist enemies, as they really thought of them then, to actually speculate against capitalism, thus allowing them to partly live off of capitalism, with their capitalist doggy-bags, of a considerably increasing kitty, of eventually, no small amount. It continues to this very day, but we’ve recently started trusting the un-trust-worthy, but be warned, they are not going to democratize, as many may think___and our markets will not over-come theirs, either, as many also falsely think___The numbers are glaringly against us, and for them___They’ve become addicted to the easy cash. They are also solidifying their autocratic ways, which is to offer freedom, without political freedom, as Robert Kagan stated, which poses a great manipulative danger to capitalism, especially when most think our free-trade policies will over-come their manipulated trade policies, when they clearly will not, without major disruptions of our cherished way of life, and this has been clearly pointed out by Neurial Rubini and Brad Setser’s, three scenario, Fed Paper, about our, possibly pending, balance of payments disaster. This is nothing short of accidentally surrendering capitalism to communism, when one falsely believes in the free-trade myth, when the enemy is control-trading against you, and gobbling you alive___And why would anyone think they’d give up the profits they’re easily making off us, going the direction they are? They’ve discovered “the goose that lays the golden eggs”___Trillions of dollars worth! I believe in fair-trade, but not in the suicidal-trade, that we are, currently, truly practicing. We are committing economic suicide, by not realizing communism’s long term intents and goals, of absolute financial suzerainty over us___or she’d sensibly and reasonably adjust her currency___up, as we have asked. It’s quite obvious what their true intent is, and remember financial suzerainty, leads to political and military suzerainty…

President Kennedy realized how dangerous Russia and China were politically and militarily, but he didn’t realize how dangerous their financial dabblings in capitalism were, or could become. Much of our financial troubles, leading to the `68 balance of payments crisis may have had much to do with the communists market speculations, especially in commodities, as there’s evidence of their wheat contracts being overly successful, more than once___How many others were? Kennedy should have realized how imbalanced the currency system was becoming, with our entry into the Vietnam conflict, and rebalanced the Bretton Woods I System, but he and his people seem to have had no idea how to successfully adjust the system, and were more than likely, just as our Fed has been more recently, too scared to drastically meddle with the system’s automatic evolution. The people who truly knew how to make it successful, in all market conditions, were both dead, as both Keynes and White died shortly after its institutions, in the `40’s. It’s really a shame the supreme architects, of such a successful system died, without penning a proper operations manual. The world would be a very different place, if they had___America would not be accidentally free-trading its own blind free-trade surrender to communism’s manipulative controlled-trade, if we had such a manual. The world would still be currency and trade balanced, had either man lived to guide the system until a crew were trained, to run this new economic ship, imho. Though there were others later, no-one understood their baby, as they did, at the time… It’s a true shame the world missed such an opportunity…

Of course one probably couldn’t expect Nixon to know any better either, as his political eco-ideology was against the Keynesian system, from the beginning, even though he stated the famous line, “We’re all Keynesians now.” I often wondered if he truly understood anything about Keynesianism. I really don’t think he did, thus he made the greatest blunders of all our presidents, in this story. Nixon is actually, accidentally, the single handed mass-murderer of millions of poor global citizens, just by his ignorance of a great system’s true operations, yet he has plenty of company over the last 36 years, with academic and political elites of both parties going along with the world’s greatest bundle of inanity, the planet has ever known. All parties are responsible for ending a system that was ever expanding world prosperity and health, and traded it for the two conflicting law systems of the GATT and no IFA I, except the non-system of miserable floating exchanges, which have starved, and otherwise killed, more innocent people, than all the communist rhetoric in the entire world. We’re fast catching up to both Russia and China’s death toll___well, maybe a bit exaggerated, but I’m trying to tell a good story, and make a sound point. Massively imbalanced floating exchanges, and the resulting hungry unbalanced currencies gobbling life, around the planet, is the most innocuous sight I know of, just because it’s un-necessary. It’s truly a shame, those who believe in such ideologies, can’t see the deaths such ideologies cause. How can I awake you, if you don’t want to be awaken? How can the few change the false mass psychology of an entire nation? How…? This is why I use the pen and personality as a hammer.

All the rest of my points, from #9, to #23 are nothing more than the ill workings of the world’s, worst and inane, floating exchange system’s international financial non-architecture. It’s truly sad, we’ve all fallen to our own psychological inanity. We are truly blind to the incentives’ transactions of the total global architecture of international finance, even though we, glaringly, obviously see the terrible imbalanced debts in our tremendously negative balance of payments, as I hear it all the time from average people on the streets of America, as well as the constant TV barrage___“When are we going to do something about China…?”

We, the academic and political elite, falsely believe free-trade will eventually rebalance global currencies, trade and prices___I warn you___It will not rebalance, in due time___The BRIC’s(Brazil, Russia, India, China) are manipulating free-trade, to the max. And, they won’t stop, because they have returned to a new, highly successful, Bretton Woods II, while we squander and die, in the absence of even a, once healthy, Bretton Woods I___Just open your eyes, and look at their success. Do you think that success is due to our wonderful functioning system, or theirs? Believe me, it’s theirs. The Bretton Woods II, IFA II, System is the most powerful international financial architecture, ever devised___We should know this just by looking at the glaringly successful numbers, of our own Bretton Woods I System, from `45 to `73___But, we don’t even know our own IFA I’s history, or theirs___Why? Can’t Americans read or add? Can’t Americans see the numbers, on the clearly printed pages, of the IMF reports…? Can’t Americans see the transactions successes of the BRIC’s___IFA II…? They state much of what I’ve here written, but they seem not to know what they speak___Why…? America had soon awake to this new dynamic of global transactions.

America definitely needs “A Grand Independent Finance and Energy Strategy”___Immediately…!!!

A $9+ trillion national debt, and $1+ trillion leaving the nation for the oil autocracies, and the trade-goods autocracy of China, every year___How long does anyone, truly, think this can last…? We’re free-trading the Eagle’s paper money, into the mouth of a Fierce Fire Breathing Dragon…!!! Last I checked, fire burns paper eagles…

America must realize, “You can only free-trade, until cheap labor, out-trades you.” This is the #1 law of capitalism and free-trade, and China has clearly, out-foxed, and out-traded us. The BRIC’s and Japan, have $3.5 trillion of our hard currencies, while we have the debt of that plus, and they will burry us alive, unless we change course___immediately___I can ADD…!!!

#24.___Why can’t we see…?

Thanks to Obama___Change the world? YES WE CAN…!

A Note To Paul Krugman

Excellent view of Keynesian thought, Paul. I'd just like to point out something you wrote, but may not have realized its thorough implications. WWII, as you rightly mentioned, was a public works project, but a massive one, and is the most important implied aspect of Keynes' entire manifesto, imho. Expansionary fiscal policy, alone, doesn't cut it. It must be accompanied by public works, in the most dire of times, as the `30's certainly were, and WWII’s recovery, clearly shows, etc., as fiscal stimulus, only, simply goes up the chimney of Wall St. investment and speculation, far too quickly, thus lowering TFP. It must be spread to Main St., through public infrastructure spending, as Keynes suggested, in the worst of times, to spread and slow the velocity of stimulus mechanics, throughout the entire economy, to truly raise TFP…

As to the deeper analysis of Keynes' great work, his "IFA-international financial architecture", of which you do not mention, in your piece, since it really wasn't in his "General Theory", yet is the central achievement of his thought, must be brought to the front, and thoroughly re-interpreted. I would title such a work, "The General Theory of Massive Currency Tariffs, Massive Currency Credits, and TFP Decline"___What Keynes/Einzig tried to prevent in 1945___Nixon instituted in the 1972 era, and evolved by 2008___to the highest, most nefarious, currency trade tariffs, credits/subsidies and off-shoring incentives, the world has ever known… Skedelsky is quite clear on the importance of Keynes IFA contributions, and further, his yet untried balance of payments "Bancor" system. I think if we were to work through a re-interpretation of these more central mechanics of Keynes' thought, we would be better prepared for what the world may shortly face…

Thanks for your great thinking,
and with due respect,
Lloyd Gillespie
(a polymath, autodidact, true Keynesian economist)

Ode to America’s Balance of Payments Inanity/Insanity!

I am America,
I see all,
I have total empirica…!

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

I am China,
I have your money,
I am the miner,
Of your total cash pot, honey.
I see your empirica,
Good-bye, America…!

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

Ah sonny, you, the power of truth, do look,
I, the truth of power, do seek.
The intellectual journey,
Makes you weak.
The true journey of cannon and money,
What you lack, and can not brook,
Makes me strong, yet meek.
You see not,
The long vision,
I seek…

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

Your paper Eagle is flying,
Into the mouth,
Of my Fire Breathing Dragon.
Who wins this buying,
For the total wagon…?

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

You use free-trade,
Comparative advantage,
Supply and demand theory,
What a trade dis-advantaged leary…

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

I use true specie point,
Incentive point,
And ppp facts.
That’s true control and command,
Not your false acts,
Free-trade, C.A., supply and demand…?

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

You, big-ego America, empirica,
You lack,
The empirica facts.
You see not…
You burry yourself, in false knowledge,
Of your long bent,
Over-brainwashed intellectual college,
Thinking it, heaven sent…
I warn you Empirica,
Miss America…!

“Woe be, to the long blind nation,
Who sees not,
Its own, self-suicidal, incineration…!”

The End…!

Thanks to Obama___Change the world? YES WE CAN…!

Tuesday, July 1, 2008

Essay On Paper Currency___Proposing A New Method For Fixing Its Value, by Benjamin Franklin

To the Author of the General Magazine.

It appears by the Resolutions of the Honorable the House of Commons of Great Britain, that it is their Opinion, that the issuing Paper Currencies in the American Colonies hath been prejudicial to the Trade of Great Britain, by causing a Confusion in Dealings, and lessening of Credit in those parts, and that there is Reason to apprehend, that some Measures will be fallen upon, to hinder or restrain any future Emissions of such Currencies, when those that are now extant shall be called in and sunk. But if any Scheme could be formed, for fixing and ascertaining the Value of Paper Bills of Credit, in all future Emissions, it may be presumed such Restraints will be taken off, as the Confusion complained of in Dealings would thereby be avoided. Something of this Kind is here attempted, in hopes that it may be improved into a useful Project. But I shall first set down a few plain Remarks touching the Fluctuation of Exchange, and the Value of Gold and Silver in the Colonies; with some Observations on the Balance of Trade; in order to render what follows the more clear and intelligible.

I. Every particular Man, that is concerned in Trade, whose Imports and Exports are not exactly equal, must either draw Bills of Exchange on other Countries, or buy Bills to send abroad to balance his Accounts.
II. The Exports and Imports in any Colony, may be managed by different Hands, and the Number of those chiefly imployed in the latter may greatly exceed the Number of those imployed in the former.
Hence it is evident there may sometimes be many Buyers and few Sellers of Bills of Exchange, even whilst the Exports may exceed the Value of Imports; And it is easy to conceive, that in this Case, Exchange may rise.
III. The British Merchants, who trade to the Colonies, are often unacquainted with the Advantages that may be made by building of Ships there, or by the Commodities of those Colonies carried to the West-Indies, or the Foreign Markets; And for that Reason, frequently order all their Remittances in Bills of Exchange, tho’ less advantageous; which must encrease the Demand for Bills, and enhance the Price of them.
IV. A great Demand in Europe for any of the Commodities of the Colonies, and large Orders for those Commodities from the British Merchants to their Factors here, with Directions to draw for the Value, may occasion Exchange to fall for a Time, even tho’ the Imports should be greater than the Exports.
V. Hence it appears, that a sudden great Demand for Bills in the Colonies, may, at any time, advance the Exchange; and a sudden great Demand abroad for their Commodities may fall the Exchange.
VI. Gold and Silver will always rise and fall, very near in Proportion as Exchange rises and falls; being only wanted, in those Colonies that have a Paper Currency, for the same Use as Bills of Exchange, viz. for Remittances to England.
VII. When few People can draw on England, or furnish those who want Remittances with Gold or Silver, Paper Currency may fall with respect to Sterling-Money and Gold and Silver, (by which the British Merchants always judge of it) and yet keep up to its original Value in Respect to all other Things.
VIII. From all these Considerations, I think, it appears that the Rising or Falling of the Exchange can be no sure Rule for Discovering on which Side the Balance of Trade lies; because that Exchange may be affected by various Accidents independent thereof. But in order to determine this Point with more Certainty, it should be considered;
IX. That whatever is imported, must, first or last, be paid for in the Produce or Manufactures of the Country. If the Commodities exported in one Year be not sufficient to pay for what is imported, the Deficiency must be made up by exporting more in succeeding Years; otherwise the Colony becomes Debtor for so much as the Deficiency is; which at last must be discharged (if it is ever discharged) by their Lands.
X. If this has been the Case with any Colony; or if the Debt of the Colony to Great Britain has been increasing for several Years successively, it is a Demonstration that the Balance of Trade is against them: But on the Contrary, if the Debt to Great Britain is lessening yearly, or not increasing, it is as evident, that the Balance of Trade is not against them; not-withstanding the Currency of that Colony may be falling gradually all the while.
I shall now proceed to the Scheme for fixing the Value of a Paper Currency, viz.
XI. Let it be supposed, that in some one of the Colonies the Sum of 110,000 in Bills of Credit was proposed to be struck, and all other Currencies to be called in and destroyed; and that 133 l. 6 s. 8 d. in these Bills should be equivalent to 100 l. Sterling; which likewise would make the said Bills equal to Foreign Coins, at the Rates settled by the Act of Parliament made in the Sixth Year of Queen Anne. At which Rate, according to this Scheme, it may be as well settled as at any other.
XII. Let One Hundred Thousand Pounds be emitted on Loan, upon good Securities, either in Land or Plate, according to the Method used in Pensylvania, the Borrowers to pay Five per Cent per Annum Interest, together with a Twentieth Part of the Principal, which would give the Government an Opportunity of sinking it by Degrees, if any Alteration in the Circumstances of the Province should make it necessary; But if no such Necessity appeared, so much of the Principal as should be paid in, might be re-emitted on the same Terms as before.
XIII. The other Ten Thousand Pounds to be laid out in such Commodities as should be most likely to yield a Profit at Foreign Markets, to be ship’d off on Account of the Colony, in order to raise a Fund or Bank in England: Which Sum, so laid out, would in two Years time, be returned into the Office again by the Interest Money.
XIV. The Trustees or Managers of this Bank to be impowered and directed to supply all Persons that should apply to them, with Bills of Exchange, to be drawn on the Colony’s Banker in London, at the aforesaid Rate of 133 l. 6 s. 8 d. of the said Bills of Credit for 100 l. Sterling. The Monies thus brought in, to be laid out again as before, and replaced in England in the said Bank with all convenient Speed: And as these provincial Bills would have, at least, as good a Credit as those of any private Person; every Man, who had occasion to draw, would, of Course, be obliged to dispose of his Bills at the same Rate.
XV. It is by Means of this Bank, that it is proposed to regulate the Rate of Exchange; and therefore it would be necessary to make it so large, or procure the Trustees such a Credit in London, as should discourage and prevent any mischievous Combinations for draining it and rendering the Design useless. I know of no Inconvenience that could arise by allotting double the proposed Sum for that Service, but that the annual Interest would be lessen’d; which in some Governments has been found a useful Engine for defraying the publick Expence. But if only a Credit should be thought needful, over and above the said Sum, and upon some Emergency Recourse should be had to it, the Interest-Money would soon afford sufficient Means for answering that Credit.
XVI. The Trustees might further be impowered and directed, to take in Foreign Coins, at the Rates prescribed by the Act of Parliament, from those who wanted to change them for Paper Currency, and to exchange for those who wanted Gold and Silver. This, it is imagined, might reduce those Coins again to a Currency, which now are only bought and sold as a Commodity. Or, if it should be judged more advantageous to the Credit of the Paper-Currency, Part of the Proceeds of what should be sent abroad, might be returned to the Province in Gold and Silver, for creating a Fund here.
XVII. I hope it will appear upon examining into the Circumstances of the Paper-Money-Colonies, by the Rule proposed above, that the Balance of Trade has not been so much against them as is commonly imagined; but that the Fall of their Currencies, with Respect to Sterling, and to Gold and Silver, has been chiefly occasioned either by some such Accidents as are above shewed to influence it; which by this Scheme will be all prevented: Or to their being issued without any good Foundation for supporting their Credit, such as a Land Security, etc. However that be, I think, there can be no room, upon our Plan, to fear, that the Credit of the Paper-Currency can be injur’d, even though the Balance of trade were against the Colony, while their Bank in London can be duely supported.
From the sad Consequence of a losing Trade, viz. that of having the Property of the Lands transferr’d to another country, it appears absolutely necessary for every colony, that finds or suspects that to be its own Case, to think timely of all proper Means for preventing it; such as encouraging Iron-Works, Ship-building, raising and manufacturing of Hemp and Flax, and all other Manufactures not prohibited by their Mother Country. They might likewise save considerable Sums, which are now sent to England, by setting up and establishing an Insurance-Office. This, I think, might effectually be done by an Act of Assembly for impowering the Trustees of the Loan-Office to subscribe all Policies that should be brought to them, on such Terms as should be settled by the said Trustees jointly with a Committee of Assembly, at a Meeting for that Purpose, once a Month, or oftner if necessary. Besides the saving to the Country in the Article of Trade, it would probably yield a considerable yearly Income towards the Support of Government; it being evident, that most prudent Insurers are great Gainers upon the Whole of their Insurances, after all losses are deducted.
Upon the Execution of this Scheme, I am persuaded, two very great Advantages must accrue; First, That the Export would be increased, and consequently bring the Balance of Trade more in favour of the Province: And, Secondly, that the Rate of Exchange would be fixed and ascertained; which, `tis hoped, would effectually remove the Prejudices which the Merchants in England seem to have conceived against a Paper Currency in the Colonies.
The General Magazine, February, 1741