“We have not adopted another possible feature of banking by which you have capital, subscribed capital, which you can lend out… It is perplexing to some people at first that that should not be necessary. In the first days of banking great stress was laid on the possession of capital but we have learned as time goes on that that is of insignificant importance. You need the capital if you are not in a closed system and have to meet liabilities for credit outside your system, but in a closed system you can reach your conclusion simply by offsetting the deposits of some members against the overdrafts of others… As there is no liability to pay outside the system it requires no risk therefore requires no capital.” John Maynard Keynes
“The scientifically grounded universal soul sees a moral path to our future ideal states…” me
New Hope for Financial Economics: Interview with Bill Janeway, by Chris Whalen
“Noesis”___The science of the exact sciences of the mind, world and universe, first clearly advanced by Plato, some 2400 years ago, is the most important explication of thought, ever, yet the most mis-interpreted of ideas, about it, ever put forward by the global community. Understanding, thoroughly, any epistemology of morality must first start here, and give a new and clear meaning to this most fundamental area of scientific thought, as it is the basis of all modern thinking, and no one has properly understood Plato’s simplicity of clear thought. Not Aristotle, not Descartes nor Leibniz, not Kant nor Hegel, and not even my favorite Charles Sanders Peirce, though he came close, with his architectonic system, expanded from Kant’s architectonic reasoning, which were both instinctively founded in Plato’s `Archetypes of Forms’…
Why is it, a simple line diagram, A, D, C, E, B, representing the `forms’ of thought, has confused the world so? AD equates to `Eikasia’(The lowest stage of knowing___images), DC equates to `Pistis’(objects of sense and opinion, plus the senses and sentiments, and less a priority of thought than `Dianoia and `Noesis’), CE equates to `Dianoia’(mind, thoughts, reason, imagination and understanding, yet knowledge of a kind, falling short of the highest knowledge, `Noesis’), and EB equates to `Noesis’(pure thought___the highest type of knowledge and wisdom beyond mathematical knowledge, and attainable only by those who understand the nature of the `Forms’ of knowledge). Now, it seems everyone’s confusion comes from what `Form’ or `forms’ actually meant to Plato, as the hundreds of philosophers, physicists and other scientists writing, or having written about the `Form/forms’, have entirely missed its complex simplicity. Some have come close, such as Kant and Peirce, and even more recent writers like W.W. Tait, yet all missed what Plato truly meant by the `Forms’, and how some, such as Husserl and Jung got it so wrong is beyond me, but I intend to set the record straight, and your own reasoning will see I’m steering you correctly.
Now, think about the above for a while, and see what is really being thought about___and you will notice it consists of four major ways(Forms) of thinking, plus a deeper combination of these four ways, which multiplies to quite a high number of thought (Forms), yet realizable to us all. To make it simpler, let’s assign Plato’s other meanings to the four `Forms’, 1.Images, 2.Emotions, 3.Reason, and 4.Logic/Logos. Watch what happens when we think primarily from any one of these four positions___Often, even in our own minds, any one way of thought can be incompatible with any one of the other ways of thinking. Everyone, if they be honest, has experienced this and tried resolving it by themselves, and more often than not, just left the idea un-resolved___I have and you have. It’s just the way the mind works, but Plato was trying to show these problems are resolvable by temporarily transcending the lower orders of our own mind’s states, to the state of pure thought, or the universal manifold of clear thought, of all thought concepts, systems and `Forms’ of, and not just to a higher conceptualization, but what is the true universal continuum of pure knowing abilities, the space we manipulate thoughts from, from which many come, as intuitions, metaphors and abductions, or retroductions, as per Godel and Peirce. This could also be considered the “architectonic without an architecture”, or pure forms of unbounded thought, as was described by Kant(thing in itself), Hegel(his idea of `the notion’, and its relationship to his rational historical evolution, and their deeper related inner space ideas), Peirce(abduction, and his inter-relational algebras’ deeper reasoning ideas about the continuum of knowing, major mathematicians are so familiar with.), Whitehead(his 9 categorial necessities of quantum motion), Wittgenstein(That of which we can not state, we must not speak…), Godel(Math can not prove the truth of itself, within its own math), Tarski(Statements in English, can not be proved within English), Gerry Garcia(Those who talk, don’t know. Those who know, don’t talk, most likely from the East), and Dylan(…ya want the truth, I’ll tell ya the truth, there ain’t no truth), who extensively studied Kant(little wonder…).
What are we to morally think of the above? If my intellect is in collisional dis-agreement with my moral soul, am I to choose or resolve? If my reason is in collision with my logic, am I to choose or resolve? If any of my emotions are in conflict with my reasoning, logic or images, am I to choose or resolve? And, how does one resolve over having to choose the lesser of two evils, or the better of two goods? Plato gave the simplest, yet truest answer ever offered___”The best order of things”___True scientific ground___The good. There is no more profound and fundamental a solution to all the minds possible ways of thinking. It pre-exists our minds, in the perfect order of the cosmological universe, and nature’s perfect natural order of species, long before the evil fallacies of man, dug his way into Earth’s crust. “The universal best order of things” not only solves all the higher order thinking problems, it also solves all lower order thinking problems, and unites them, just by realizing such problems as compassion and empathy, may cause headaches to mathmatize now, but can easily be seen as `responsibility to act’, which conveniently converts to ‘the numerical best order of things’, through its natural ethical correspondence of the true, good and beautiful, when using simple magnitudes math, and model comparisons___the grounding copula, and high-cupola of universal understanding. When you take a thorough look at all emotional and lower order moral problems, they can all be correspondingly boosted, i.e., higher compared to our higher mind’s understandings, as a simple numerical best orders of things. Just look at any problem you may see, and ask, “Can the best order of things be applied?”, and you’ll quickly see it can, once you finally understand Plato’s `Forms’ are no more than temporarily transcending the many `forms’ of lower order thinking. Higher order `Forms’, continuums, manifolds, frames, super-concepts of concepts, inner and outer spaces, and their connectors/copulas can resolve all the doubts and conflicts of lower and higher order thought.
Still, what are the `Forms’ Plato, so long ago, unintentionally confused the world with? Kant accidentally gave this answer, when he was talking about lines in one’s imagination, without even realizing it. Just think about his thought experiment, two lines in inner space, the mind, and now start manipulating them in open inner space, and ask, what’s that space between the lines, I am actually manipulating? That’s your `Form/forms’ of pure thought, your own mind is moving, i.e., you are actually moving the photons of inner space to move those lines, or set up any mental experiment, say a steel basketball, in an empty auditorium of say 1000 seats. Now, mentally pick up the steel ball and pass it from corner to corner, and to all corner seats, then pass it to all the other seats, bounce or levitate it in the air, and simply ask, “How am I doing this?” You see, the only way imagination works is to manipulate the copula of the continuum, and the only scientific copula existing in imagination, that allows the merging of wave/particles, or the morphing of concepts, metaphors and wave/particles, is photons, the only wave/particle allowed by the laws of physics to totally and permanently super-position, or clone, as Einstein first stated. Electrons can not fill this bill, as this is against the laws of physics, so it’s photons we are manipulating, photons of the inner-space-continuum/manifold, or the pure `Form/forms’ of thought___Plato’s mystery exposed…
The New Epistemological Morality of Economic Decisions…
Moving on to a larger view of morality that is, at this very moment, affecting all our lives, and will for some time to come, “Where does morality fit into the major economic puzzle?” If you’ve noticed, economics is called `Political Economy’, and the reason is sensible economists have always known economics is at base political, i.e., emotional desires, thus the moral aspect. No matter what economists may fundamentally know, and try to institute, it is the political realities of human desires which will rule the day, and all of history. Years past, these issues were settled by wars and plunder, but as we became more civilized, moral/immoral/a-moral politics became more involved in the year to year decisions of peoples and governments, as Machiavelli clearly showed, yet still quite inter-dispersed with the occasional wars, until the major wars of the last century, and now, there’s only the policing wars, and a few rogue wars, such as Iraq. My point is that, for the first time in history major human, moral and political decisions played the major role in WW I and WW II finances and policies, teaching some of the world’s economists more about economics, than ever before in history, as is well recorded in many books, and government records, and none better than Robert Skidelski’s 3rd volume about John Maynard Keynes. This one volume is where you could see Plato’s `Forms’ of thought being applied, at near the highest level possible, by the minds of the world’s wisest. You can be introduced to three of the highest `Forms of Thought’ man ever dreamed, in Hjalmar Schacht, John Maynard Keynes, and Harry Dexter White, and much of it with the founding help of Thorstein Veblen and Irving Fisher, the first a student of Charles Sanders Peirce, and the second a student of Josiah Willard Gibbs, the inventors of 2nd order logic, inter-relational algebras and pragmatism; and vector math and mechanics, along with modern statistical mechanics. To say the least, it was a period of genius, by more than a few…
This is the era where economists learned the moral desires of the populace would be the most controlling aspect of actual economics, the economists could not overcome. No matter the great systems put forward, the exchange trade barter clearing system of Schacht, which most countries had to use during the war, or the other two competing systems of White and Keynes, the people’s wishes of organized labor played the deciding hand, even in Hitler’s Germany. So, not as many think, `economists run the world’, no they don’t. They’d like to, but the people’s desires trump all the knowledge of the economists, academics and intellectual elites, by the shear demands of organized and un-organized labor’s real hand of power, and corporations brute financial desires. You can’t starve the populace or the corporations, by either bad or good policy, and you often can’t put good policy in place, if labor, corporate and political elites can’t understand such ideas as “Labor Wage Banks” to store their stocks of wages, through taxes, when societies inflation rates soar, even though they will be returned in times of recession and deflation to re-inflate the economy back to more normal states. Keynes found this out during the war, when he wanted to do just this, and labor shot down the idea cold, thus forcing England to Semi-Schachtian barter, wage and price controls, with its attending major international capital controls. The U.S. was also forced to similar methods of war finance, due to one nation, Germany, having the upper hand, and if we and others hadn’t copied, as it was the highest efficiency war finance system, we’d have been on the losing financial end, and possibly losing the war effort, outright. On the other hand, Keynes moral bancor’ international exchange clearing banking system would have worked with the same valor, for all the people of England, and most of the greater world, although it was never tried due to labor’s and many commercial interests’ ignorance of the “Labor Wage Taxing and Banking” system proposal, and it’s entire banking and international exchange clearing mechanisms. So, higher morality, at the largest stages of thought, was trumped by labor’s and commercialism’s lesser moral positions, of “money in hand” and “no trust” of a government sponsored “Labor Wage Bank” to later repay, nor the major system’s mechanics reform feared by the commercial interests to relieve national debts, when in fact, it would have greatly benefited, not only England, but the greater world at large___What a loss___What a shame…
Can the world now awake, and institute a newly updated scientific version of Plato/Keynes/Davidson IMCU(international money clearing unit) system…?
And now we arrive at the present moral epistemological stage, of a world held in checkmate by the personal desires of a many competing interest groups, for the future safety and sovereignty of all the nations, perched on the cliff of global depression, unless we make the correct moral decisions, of the highest and `best order of things’, and take the actionable intelligence the dire situation requires. We must draw from the mental states of temporary transcendence, over our petty ideologies, beliefs and fears, to reach that higher truth state, offered by understanding the “Forms of Thought” of which Plato, long ago laid the groundwork. What shall we choose? The most for the few? The most for the middle? Or, the most for all, the middle way, of “the best order of all things?” I’ll easily choose Plato’s, Veblen’s, Keynes’s and Davidson’s higher `Forms’ of clear thought, but that doesn’t mean we can educate the lower order thinkers, to the higher order thinker’s “Forms of Thought” necessary, to achieve the success required. This is nothing but a moral question of the highest order, of our very survival as a nation, and the greater world at large, yet can we mathmatize the world of economics into simple enough idea presentations, to the lower order thinker’s acceptance, or will we fail to do the simple, and wade into the needless complexities, of special interest arguments, and no intelligent action? This is the real question…
The Scientific `Forms’ of Present, Probable and Possible Evolution, to The Sovereignty and Autonomy of Scientific Exchange Clearing, Banking and Trade Systems, to Provide for A Safe Future For All Earth’s Citizens…
`Noesis’ has had a long journey, sometimes on top of world thinking, but all too often lost in the deep woods of incorrect thinking. If we are going to truly think about solving the world’s massive moral financial problems, we are going to have to scientifically, epistemologically investigate, and plum the depth’s of Plato’s `Forms’, and realize he was talking about nothing but the actual, probable and possible absolute truths, just as Aristotle stated, “Forms are the absolute truth.” It is only in these `Forms of Absolutely True Thought of Systems Evolution’ we have any chance of a path, and survival, out of the mess we’ve created. We have simply ignored the scientific, for the un-scientific organization of moral and crude money and trade systems, far too long. It’s time for change from this un-scientific method, to the purely and absolute truth of the absolutely moral scientific method.
Above, and in the past posts on this blog, plus the posts on MacroMouse, I’ve listed several alternative and scientific `Forms’ of evolutionary money systems, from Plato’s own(bottom of post), to Benjamin Franklin’s, Hjalmar Schacht’s, John Maynard Keynes’s, Harry Dexter White’s, Jane D’Arista’s, Paul Davidson’s and even my own. I’ve also mentioned Egypt’s tally-board system, and several computerizable facsimile systems, and the matching law systems, needed for implementation. The choice is ours, to stay stuck in the mud, and end in the `Mad Max’ world of collapse, chaos and global WW III, or take the path of enlightenment offered, by myself and others___What choice…?
If need be, and to make this information the simplest possible, we can go to any one of the systems mentioned, or a combination of, as they are all scientific `Forms’ of sovereign autonomous systems, but I’ll first talk about the three already known paths___Schachtianism, Keynesianism and Whiteianism, which are clearly laid out in Robert Skidelski’s 3rd volume of J.M.Keynes, along with Paul Davidson’s newest book on J.M. Keynes. The present world of derivatives’ excess system debt costs may force us to a temporary Schachtianism, so first if this be the course of present evolution, we can go to his war-time finance and barter-trade system of closed foreign exchanges, multi-lateral trade agreements, and strict capital, wage, price and market controls. This is the least favorable system, but we scientifically already know it works, as it’s the system most of the world resorted to, to finance and barter WW II to its conclusion___Care must be taken to use `Slow Sliding Time Scale Change Laws’, for this system as well as any other, as more damage can be done with too fast a change, than slow.
The second least favorable system is Whiteianism, which all the economic and government historians have written most about, as it’s the system we actually had in place, from 1946 to 1973, and we also know this system worked, and worked much better than Schachtianism, or the present fiasco, yet leaders mistakenly threw it away, in favor of de-regulated untrammeled free-trade, and we’ve all seen where that has put us. So, Whiteianism is far better than the present state of free-trade over-debted-extension and total collapse, yet not the most scientific system, or even close to the many other scientific money systems, available to us.
The most favored presently well-know system is the scientific autonomously sovereign ideas’ combinations of Plato’s, Keynes’s and Davidson’s updated international exchange clearing and banking system, that will actually pay down the national debts of all nations, while reviving them through massive jobs expansions, to rebuild markets from the bottom up, as the top-down is dead. In this system, the governments of the world must all now act as `Market Makers’ and install these newest `Forms’ of law, but very carefully, through a system of `Slow Sliding Time Scale Change Laws’, as mentioned above. This will best protect what’s left of the existing markets during the necessary transition stage. And, realize this is not a system to benefit any one country over another, as it only properly functions with the participation policy of “all for one, and one for all”, big and small alike.
Now, do we choose one of these three `Forms of Systems’, or do we choose one of a dozen other possibilities? Egypt lasted almost 5,000 years, by some guesstimates, with a system of `Tally-board economics’ similar to that used in the farming communities or certain piece-meal factories, until she finally went to fiat money systems and the over-extension and collapse of too free-a-free trade, so here’s another system we actually and scientifically absolutely know works. It is crude, but can be computerized to perform all the functions of the present Heinz #57 capitalisms and socialisms/communisms of the entire world, and can be made into many different forms of `Super-Capitalism’, as can any one or combination of the systems mentioned___It’s just some are better ordered than others, and it’s `the best numerical order of things‘, we’re looking for, as that’s the absolutely scientific. Any of you can figure these scientific systems out, to the points of clarity of understanding necessary, just by realizing it’s all and only a numerical progression of evolutions___That’s 1, 2, 3, etc., etc… Just use your mind to it’s given potential, and you’ll know all this scientific stuff. It doesn’t take a genius…
Finally, the moral question___Which is better…? The Plato/Keynes/Davidson scientific international exchange clearing and banking system is the best presently well-know system, but my system of `Internal Exchange Clearing’, can scientifically bail this system out, if the moral hazard issue rears its ugly head, while this system is in use, and moral hazard is nothing more than the special interests’ opposition to `the best numerical order of things’, though they know not their opposition to `the best’___the good. But why would they?___you may ask… Well, that’s the natural human moral nature, no other human being or economist can control. The special interest desires are powerful enough to over-rule most any science we may devise, and that’s why I have developed `Internal Exchange Clearing’ which can thwart the human desires equation of special interests, with a scientifically engineered jobs and wages system of absolute infallibility. Now, of course many of you would dispute this fact, but you must not yet fully understand the logic of Plato’s line of `Form’. No-where on that line will you find the `Form’ Plato was referring to___It’s the absolutely scientifically true present, probable and possible evolutions of the universal all___That is the only place absolute truth exists___The temporarily transcended `Forms of Pure Universal Systems Thoughts’…
“The world’s future rests in the hands of sufficient and efficient necessity of scientifically grounded moral actionable intelligence.” me
P.S.
Please read all this blog’s past posts, and links, to fully understand the above…
Just to give you an example of Plato’s `Archetype Form of Thought___The Scientifically True Middle Way’, some 2400 years old:
"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
Friday, November 21, 2008
Sunday, November 16, 2008
National Security Alert #1___The Epistemology of Economics…
The US Economy Must Go To Defcon 1, by Fabius Maximus and Link
"Reforming The World's International Money", by Paul Davidson
The Entire Global Market Law System Is Broken___Throwing Good Money After Bad Law Makes No Sense…!
Essay On Paper Currency___Proposing A New Method For Fixing Its Value, by Benjamin Franklin
Franklin D. Roosevelt___First Inaugural Address
Were it not for Charles Sanders Peirce, and his student Thorstein Veblen, our sciences and knowledge systems would lack clarity. No other person, and student, built system’s knowledge and understanding to such thorough and accurate meanings, yet the modern world seems confused, confounded and less than systematic___Why…? No matter what subject area we choose, there are always oppositions and variations to our ways of stating and knowing our subject matter. Years past, I’d realized there were drastic problems with relaying and understanding information and knowledge, between differently interested parties. It especially shows in such subject areas as, “The one and the many”, “The whole and the parts”, “Breadth and depth”, and subjective and objective. Back in the `70’s, I first heard it well expressed by the `Rock and Roll’ group, `Savoy Brown’, by the lyric, “Outside looking in. Inside looking out”. I then asked the question, “What one word or concept of, or least combination of words/concept of, could represent clearly, every thought possible, on earth?” I only discovered a possible answer just last week.
First, why has it always been so important to me, to maintain this quest all these years…? In a word___Clarity___of meaning. Though Peirce and Veblen accomplished much, they didn’t foresee the explosions of complexities of meanings, the modern world would conjure up. My purpose is to show how `a conceptual contract mechanics’ can simplify and unify what Peirce/Veblen once unified___anew. Let’s start off with `truth and anti-truth’, where an epistemology of the truth contract, can be compared to the epistemological philosophical fallacy of the anti-truth contract. I am here using `contract’ to distinguish something real, of the absolute world.(I’ll get to the epistemology of the absolute later). Since I’ve used contract in both instances, of truth and anti-truth, then I do accept a reality within both, but the first is the reality of usefulness to all, and the second is the reality of existence, lacking extreme utility and usefulness to all. Now, why do we have such a world, of usefulness and near uselessness, when compared to the all? Entertainment? Possibly. But the deeper reasoning is just simply a complex evolution, of a world of learning minds, and the timings of…
Eclectic Universal, Conceptual, Statistical, Contract Mechanics___A Method of How to Unify and Compress Information and Knowledge, Into Wisdom…
This is #1 in a series of posts, to attempt an entirely new method of explicating the complexities of world economic and monetary thought, in a most clear voice, grounded in “Mother Wit” and “Common Sense”, as honors the memories of Charles Sanders Peirce and Thorstein Veblen. Oh, it’s very true, there are many other voices of truth and wisdom whom I am relying upon, such as Benjamin Franklin, Alexander Hamilton, Josiah Gibbs, Harry Dexter White, John Maynard Keynes, and Paul Davidson, etc., etc., but Peirce and Veblen represent the clearest voices of eclectic universalism, grounded solidly in “Mother Wit” and sound “Common Sense”, as my base... You may wonder what Josiah Gibbs is doing in an economic post, but American economist Irving Fisher was one of his Doctoral students, thus the link of wise men inter-connecting American thought...
To start; All frames of reference of absolute truth, in the real world, are contractual facts, or contractual obligations and outcomes of people’s fundamental ideas of___There exists no other single word frame/concept possible, that covers such a large territory of statistics, ideas and mechanics of___as contracts. We, as a people, absolutely require such an architectonic framework, to even begin to understand the dynamic complexities of this modern world. This is exactly what Peirce was saying in the first quote of this post. Without such a basic fundamental reference, of eclectic universal conceptualism, the mind wanders to far a field of any semblance of knowledge and understanding, as the basic wit and common sense demands the universal concept, first, for any further understanding to function clearly and properly. Truth has been, more often, lost to this very fact, of the improper framing of ideas to fundamental sense, mentioned, known and communicated, than any other reason, a people and nation have ever lost its senses to. I can not stress the importance of proper architectonic understanding and mechanics enough, to explain the reasons for our known truths, evolving to the anti-truths of our own destruction, and the proper way to return America to her good senses, because believe me, she’s lost her reasonable senses, to the anti-truths, of modern nonsense, and I think you all know it...
Contract mechanics is a simple way of replacing the economic complex, with a well known and easily understood word___Contract___and its workings idea__Mechanics. It appeals to the basic wit and common senses of all strata of our society, and elicits easy interpretations and meanings, especially when we start explaining its mechanics from the ground up, by starting with the fact___the dollar bill, or any coin, is a fundamental contract, for anyone’s purchases, guaranteed anywhere in America and the world. There is no place or idea on Earth, contract and contract mechanics can not be applied, by simply relating the concept discussed, i.e., even to all other social, and even spiritual contracts, and the related mechanics of them all. You want or need simplicity of complexity, then think contract mechanics of any and all ideas, on Earth, and you’ll quickly realize, I’ve told you a new, yet so obvious a truth, it seems impossible it’s not been mentioned before___It’s really quite magic at unifying and compressing information and knowledge into more basic understandings of truth and wisdom. Conceptual contract mechanics___Even I could have never dreamed it so possible of simplifying complexity, especially economic complexity.
Of course, I’ve only mentioned it’s first stage of possibilities of explaining a needlessly over-complex world, and now, from the simplest of concepts to the most complex of economic profundities, I’ll demonstrate the simplicity of which the “Shadow Banking System’s” derivatives markets can be understood by all, through this new idea of its “Contract Mechanics”. Derivatives lends itself to contract mechanics the easiest, since all derivatives are actual contracts, traded between contracting parties, but the underlying contract mechanics of these contracts also involves the constitutional contracts of all nations involved. First, we should recognize the fact, that our constitution is the national contract of all America’s contracts, yet derivatives contracts not only operate within the constitutional contract, but also outside it, in the international corporate contract area of law, and non-law areas, except the trust between corporations, and the contracts traded between them, from most all nations on Earth. But realize, it’s still nothing but simple contract mechanics, at its base, and in actual practice, no different than you having credit card leverage(contract leverage) against your home mortgage(another contract) and yourself may be up against your finance(contract) limit, as are many corporations now, with their excess toxic debt derivatives contracts, as many went to bad debt with the global market downturn. So, the entire derivatives contract system is very similar to you, or your neighbor, not being able to meet your excess contract obligations, to your or his creditors/bankers/corporations, or other such market holders of contract obligations. It’s all contract privileges and obligations, and the trading mechanics of. The real problem is, the real underlying trading value of all these toxic derivatives contracts is approximately $50 trillion, and the total contract value of all the world’s economies is about $50+ trillion, while the total market transactions of derivatives turnover was last recorded at some $596 trillion. So, that’s actually about an equal obligation of a partial % of toxic and good contracts, against the privileged contracts of all the world’s citizens___A big problem, and I’ll deal with the actual, in depth, mechanics later…
At this point, I’d ask; “How much can the world’s aggregate balance of payments contracts actually finance, while trying to support this massive amount of derivatives, and other personal and corporate contract debt defaults? What is the limit of our presently evolving contract debt collisions, no matter what financing route we may take? Can we financially survive this tsunami of global depressions, or will we be forced to monetize the national debt contracts, or at the least, some of them, if not all? And, if we must monetize the national debt contracts, of say many nations, whose monetization system shall we use___Schacht’s, Keynes’ or Davidson’s?” These are the $64 thousand dollar questions…?
to be continued...
"Reforming The World's International Money", by Paul Davidson
The Entire Global Market Law System Is Broken___Throwing Good Money After Bad Law Makes No Sense…!
Essay On Paper Currency___Proposing A New Method For Fixing Its Value, by Benjamin Franklin
Franklin D. Roosevelt___First Inaugural Address
“By an architectonic I understand the art of constructing systems. As systemic unity is what first raises ordinary knowledge to the rank of science, that is, makes a system out of a mere aggregate of knowledge, architectonic is the doctrine of the scientific in our knowledge, and necessarily forms part of the doctrine of method.
... By a system I understand the unity of the manifold modes of knowledge under one idea. This idea is a concept provided by reason – of the form of the whole – in so far as the concept determines a priori not only the scope of its manifold content, but also the positions which the parts occupy relatively to one another. The scientific concept of reason contains, therefore, the end and the form of that whole which is congruent with this requirement. The unity of the end to which all the parts relate and the idea of which they all stand in relation to one another, makes it possible for us to determine from our knowledge of the other parts whether any part be missing, and to prevent any arbitrary addition, or in respect to its completeness any indeterminateness that does not conform to the limits which are thus determined a priori. The whole is thus an organised unity (articulatio), and not an aggregate (coacervatio). It may grow from within (per appositionem). It is thus like an animal body, the growth of which is not by addition of a new member, but by the rendering of each member, without change of proportion, stronger and more effective for its purposes.” Charles Sanders Peirce
“Veblen does not mince words: the peaceable type of person with a sense of goodwill toward fellow humans is regarded in highly competitive, Western societies as “good-for-nothing.”On the other hand, “the competitive individual can best achieve his ends if he combines the barbarian’s energy, initiative, self-seeking and disingenuousness with the savage’s lack of loyalty of clannishness.” The peaceable traits that are absolutely essential to the preservation of the family
and society “are disserviceable to the individual” whereas the predatory habits that help the modern barbarian compete simultaneously destroy the very fabric of society.” Thorstein Veblen
“Veblen believes that Western Civilization is fundamentally peaceable as well as barbaric, and that this dualism will never be resolved completely. postmodernists, modernists and positivists cannot digest Veblen’s . . . efforts from the previous fin de siécle to posit a dualism of human nature or homo duplex. Hence, there arise among modernists efforts to obfuscate barbarism in modern cultures, and among postmodernists efforts to deny the very existence of culture, much less “good” versus “bad” culture. Much is at stake here.” Thorstein Veblen
Were it not for Charles Sanders Peirce, and his student Thorstein Veblen, our sciences and knowledge systems would lack clarity. No other person, and student, built system’s knowledge and understanding to such thorough and accurate meanings, yet the modern world seems confused, confounded and less than systematic___Why…? No matter what subject area we choose, there are always oppositions and variations to our ways of stating and knowing our subject matter. Years past, I’d realized there were drastic problems with relaying and understanding information and knowledge, between differently interested parties. It especially shows in such subject areas as, “The one and the many”, “The whole and the parts”, “Breadth and depth”, and subjective and objective. Back in the `70’s, I first heard it well expressed by the `Rock and Roll’ group, `Savoy Brown’, by the lyric, “Outside looking in. Inside looking out”. I then asked the question, “What one word or concept of, or least combination of words/concept of, could represent clearly, every thought possible, on earth?” I only discovered a possible answer just last week.
First, why has it always been so important to me, to maintain this quest all these years…? In a word___Clarity___of meaning. Though Peirce and Veblen accomplished much, they didn’t foresee the explosions of complexities of meanings, the modern world would conjure up. My purpose is to show how `a conceptual contract mechanics’ can simplify and unify what Peirce/Veblen once unified___anew. Let’s start off with `truth and anti-truth’, where an epistemology of the truth contract, can be compared to the epistemological philosophical fallacy of the anti-truth contract. I am here using `contract’ to distinguish something real, of the absolute world.(I’ll get to the epistemology of the absolute later). Since I’ve used contract in both instances, of truth and anti-truth, then I do accept a reality within both, but the first is the reality of usefulness to all, and the second is the reality of existence, lacking extreme utility and usefulness to all. Now, why do we have such a world, of usefulness and near uselessness, when compared to the all? Entertainment? Possibly. But the deeper reasoning is just simply a complex evolution, of a world of learning minds, and the timings of…
Eclectic Universal, Conceptual, Statistical, Contract Mechanics___A Method of How to Unify and Compress Information and Knowledge, Into Wisdom…
This is #1 in a series of posts, to attempt an entirely new method of explicating the complexities of world economic and monetary thought, in a most clear voice, grounded in “Mother Wit” and “Common Sense”, as honors the memories of Charles Sanders Peirce and Thorstein Veblen. Oh, it’s very true, there are many other voices of truth and wisdom whom I am relying upon, such as Benjamin Franklin, Alexander Hamilton, Josiah Gibbs, Harry Dexter White, John Maynard Keynes, and Paul Davidson, etc., etc., but Peirce and Veblen represent the clearest voices of eclectic universalism, grounded solidly in “Mother Wit” and sound “Common Sense”, as my base... You may wonder what Josiah Gibbs is doing in an economic post, but American economist Irving Fisher was one of his Doctoral students, thus the link of wise men inter-connecting American thought...
To start; All frames of reference of absolute truth, in the real world, are contractual facts, or contractual obligations and outcomes of people’s fundamental ideas of___There exists no other single word frame/concept possible, that covers such a large territory of statistics, ideas and mechanics of___as contracts. We, as a people, absolutely require such an architectonic framework, to even begin to understand the dynamic complexities of this modern world. This is exactly what Peirce was saying in the first quote of this post. Without such a basic fundamental reference, of eclectic universal conceptualism, the mind wanders to far a field of any semblance of knowledge and understanding, as the basic wit and common sense demands the universal concept, first, for any further understanding to function clearly and properly. Truth has been, more often, lost to this very fact, of the improper framing of ideas to fundamental sense, mentioned, known and communicated, than any other reason, a people and nation have ever lost its senses to. I can not stress the importance of proper architectonic understanding and mechanics enough, to explain the reasons for our known truths, evolving to the anti-truths of our own destruction, and the proper way to return America to her good senses, because believe me, she’s lost her reasonable senses, to the anti-truths, of modern nonsense, and I think you all know it...
Contract mechanics is a simple way of replacing the economic complex, with a well known and easily understood word___Contract___and its workings idea__Mechanics. It appeals to the basic wit and common senses of all strata of our society, and elicits easy interpretations and meanings, especially when we start explaining its mechanics from the ground up, by starting with the fact___the dollar bill, or any coin, is a fundamental contract, for anyone’s purchases, guaranteed anywhere in America and the world. There is no place or idea on Earth, contract and contract mechanics can not be applied, by simply relating the concept discussed, i.e., even to all other social, and even spiritual contracts, and the related mechanics of them all. You want or need simplicity of complexity, then think contract mechanics of any and all ideas, on Earth, and you’ll quickly realize, I’ve told you a new, yet so obvious a truth, it seems impossible it’s not been mentioned before___It’s really quite magic at unifying and compressing information and knowledge into more basic understandings of truth and wisdom. Conceptual contract mechanics___Even I could have never dreamed it so possible of simplifying complexity, especially economic complexity.
Of course, I’ve only mentioned it’s first stage of possibilities of explaining a needlessly over-complex world, and now, from the simplest of concepts to the most complex of economic profundities, I’ll demonstrate the simplicity of which the “Shadow Banking System’s” derivatives markets can be understood by all, through this new idea of its “Contract Mechanics”. Derivatives lends itself to contract mechanics the easiest, since all derivatives are actual contracts, traded between contracting parties, but the underlying contract mechanics of these contracts also involves the constitutional contracts of all nations involved. First, we should recognize the fact, that our constitution is the national contract of all America’s contracts, yet derivatives contracts not only operate within the constitutional contract, but also outside it, in the international corporate contract area of law, and non-law areas, except the trust between corporations, and the contracts traded between them, from most all nations on Earth. But realize, it’s still nothing but simple contract mechanics, at its base, and in actual practice, no different than you having credit card leverage(contract leverage) against your home mortgage(another contract) and yourself may be up against your finance(contract) limit, as are many corporations now, with their excess toxic debt derivatives contracts, as many went to bad debt with the global market downturn. So, the entire derivatives contract system is very similar to you, or your neighbor, not being able to meet your excess contract obligations, to your or his creditors/bankers/corporations, or other such market holders of contract obligations. It’s all contract privileges and obligations, and the trading mechanics of. The real problem is, the real underlying trading value of all these toxic derivatives contracts is approximately $50 trillion, and the total contract value of all the world’s economies is about $50+ trillion, while the total market transactions of derivatives turnover was last recorded at some $596 trillion. So, that’s actually about an equal obligation of a partial % of toxic and good contracts, against the privileged contracts of all the world’s citizens___A big problem, and I’ll deal with the actual, in depth, mechanics later…
At this point, I’d ask; “How much can the world’s aggregate balance of payments contracts actually finance, while trying to support this massive amount of derivatives, and other personal and corporate contract debt defaults? What is the limit of our presently evolving contract debt collisions, no matter what financing route we may take? Can we financially survive this tsunami of global depressions, or will we be forced to monetize the national debt contracts, or at the least, some of them, if not all? And, if we must monetize the national debt contracts, of say many nations, whose monetization system shall we use___Schacht’s, Keynes’ or Davidson’s?” These are the $64 thousand dollar questions…?
to be continued...
Monday, November 3, 2008
Eclectic Universal Conceptualism...
A Note...
Yeah, I wrote a reply earlier, but my machine crashed, so here's something of what I had to say. Sarkar's ideas are generally in line with many new western thinkers, such as Herman Daly and Hazel Henderson, two I've already mentioned to you. This link: http://www.proutist-universal.org/ would actually be better to see how he thinks, as it covers more of the social-economic-political points of views. What struck me was the bottom-up approach, as it relates to Obama's ideas. Also his ideas about other top-down and bottom-up failures, i.e., socialism, communalism, communism, bad forms of capitalism. He's also much in line with Gandhi's thinking. My interpretation is probably different than your's or most, since I've studied so much of this already, but I'd like to point out my central observation, which is; "A New Form of Responsibile Co-operative Capitalism". We've already tried all forms to the right and left. It's about time we tried the middle path___Co-operation to find the essential truths of government and markets, instead of settling for "A concensus of the half-blind". I was just impressed that India had such a philosopher of note, with the pragmatic middle ideas, which blend with the directions I think/know the world must go. It's also in line with a new series of documentary on Link TV, The Planet. They laid out four possible directions of Earth, for the future; 1.Star Trek, where we build "Pig-Sty-Scrapers" to house 90 billion inhabitants, through the expansion of present synthetic technology. 2.Mad Max, where the world ends in terror, wars and total collapse. 3.Eco-Topia, where we start to co-operate through becoming more responsible, to build a sensible and proper world. 4.Big-Government/Big-Brother, what I would call totalitarian egalitarianism. Most don't realize 3. and 4. are the same, as any true utopias must have organized control, yet there's a big difference whether such control is voluntary co-operation or not. As I see it, Sarkar's ideas of individual sovereignty and autonomy, achieved through responsible co-operation, offer our best chance, as this is exactly what I've written about lately. Many have preached inter-dependency, but I see the sovereign autonomous route as much more desirable. It's just a matter of transcending the contradictions of the squash/mush-room, sitting atop all our shoulders. This is where eclectic universal conceptualism comes in, i.e., study to achieve the transcended truth, of all ideas...
You know, the only reason I looked up "Eclectic Universalism" was, it was running through my mind, when I awoke Saturday morning. I said, "Well there's a new combination of words, let me see where this leads". Since finding Sarkar and others about eclectic universalism, I had a new vision. The best way is to just state it, and this isn't being sexist. It's just men have been the dominators of societies, and still are in many nations, whereas women have only in recent history attained power and vote. Here it is; "The great man sees the same great man, in all men". Now, at first glance, this may seem contradictory, but it's actually not, even if one wants to take the extreme example of Hitler, as another great man stated; "The worst of society works the public good." Mandeville, I think. Anyway, just think how much the modern world learns from such monsters as Hitler, or even Bush/Cheney. At the highest transcendence levels of vision, all minds meet in absolute non-contradiction___It's our belief systems, attached to our ideas, that prejudice our views. Now, this isn't to say that Hitler wasn't a true monster, which he was, but when transcended to the total eclectic universal view, the world owns all its own monsters, which are often created by un-intended consequences of society's earlier actions. In the case of Hitler, it would be the "Versailles Treaty", where England and the Rest of Europe starved Germany to the brink of death, after WWI___What'd they expect to get___Mickey Mouse?
I've drifted off my point here, but if we could all see "other" as "great-self-self" we'd have far less trouble understanding how to transcend ourselves, to arrive at the ultimate truth necessity. Just take the Republicans and Democrats___One argues for absolute top-down government-economics-social conditions, and the other argues for bottom-up government-economics-social conditions___When both are always simultaneously required___The middle responsible co-operative position. It matters not if the argument is taken back to Paganism/Science; Paganism/Christianity; Christianity/Science, or any opposing contradictions one chooses___The differences are simply generated by the prejudiced belief systems/ideologies, overly attached to the same humans' higher natures of sameness, and sound analytical truths. You know, something the world seems to not know, is the fact that the exact analytical sciences have only "ONE" truth fact answer, for each case investigated___Beliefs must be dropped off, to achieve any exactness, in the true sciences. This doesn't mean one must give up any personal beliefs. It just means that in order to achieve exact scientific truth, a co-operation and responsibility to hard fact is required. This just simply requires temporarily transcending one's personal feelings, beliefs, meta-mind to achieve one side of the higher nature's mind. The higher nature of the natural feeling, responsible, co-operating mind is still in tact to assure all is guided to the "greater good for all" concerned...
What I mean is, most think there are such ideals as true open-ended utopias, ya know, like perfection? Few realize that true perfect liberty is an agreed to, reduced freedom, for the benefit of all concerned___Ya know, like if we all had a radical utopian freedom, we'd all have the liscencious right to do what we pleased, and the law be damned. I mentioned "any true utopias must have organized control" the way I did, to clearify the diffs between open-radical-utopian ideals, that are truly impossible, as verses sensible utopias, of the best possible of worlds, under sensible yet better functioning legal systems, through much higher evolved law systems, and true social justice, than what we presently have. This would be far better organizations of global monetary/law/political and distribution systems, of far less exploitation, subordination and dominance, than now exists. And as to the system I'm relating to, I do not mean one of less freedoms/liberties, we now possess, but one of more, yet most don't realize different organizations of laws/contracts, even more laws in certain areas, while reducing useless laws in other areas, can produce more and better liberty/freedom systems. It's just hard to explain to someone, how you are going to add/change/reduce laws, yet increase freedoms/liberties, yet it's possible. Justice, true global justice, is very hard for most to see, as we've all been brainwashed into the present systems of injustice, yet better freedoms/liberties are achievable, through better organiztions of the very existing systems of contract justice. Remember, even the dollar bill is a contract, and the U.S. Constitution is the "Contract of All Contracts", yet this social contract does not hinder us to change sub-contracts of the major contract, when we realize it's only our false beliefs/ideologies, over-attached to it, now preventing the advancement of better contracts. The real problem enters in the international trade of contracts, where more law would actually create much more freedom, for the local contracts___the money contracts, that benefit the social contract. I could ramble on forever, but I'd have to draw it out for you, to totally understand what I really mean. It's just more international government control over too free a corporate contracts, gives us more local freedom/liberty, automatically. It's just nations have always resisted this concept, because their local allegiance mind tells them, it's more restrictive, when it's truly not. Kinda a paradox, but it's not___It's just a matter of interpretation of understanding the total control/market function of international contracts, as they relate to local social justice contracts, and the expansion of these local justice contracts, as really, they(the local social contracts' freedoms/liberties) expand, by simply reducing the corporate international open-outlaw-contract control, over the entire world's local contracts, by actually increasing government/democracy contract control over them. This can be more easily stated, but I seem to be spinning in circles, trying to explain the simplicity of this complexity, but the truth is that a reduction of nefarious corporate international contract freedoms, is automatically an increase of personal, social contract, and national liberties. The way George Monbiot put it was, "Local democracy is impossible, without international democracy." I guess that's best. We presently have a too free a corporate outlaw international contract system, organized through the corrupt WTO free-trade contract system, related tax havens, and all other foreign exchange near-lawless-contracts, presently controlled by the outlaw corporations' inter-trusts, oppressing the local/national contracts' liberties___This must change. Hope that's clear enough. Let me know if it's not...
To me, the easiest way to understand interdependence is as a social contract concept. I'd just ask the question; "Is the interdependence of global socialist/communist acting, corporate contract dominance/exploitation of local contracts desirable, or is a more sovereign democratic action of local contracts' liberties/freedoms expansion more desirable?" When it comes to the sovereignty/interdependence of persons to persons, in personal relationships, I think that may be one of choice. Myself, I'd always choose sovereignty and independence, i.e., the higher degree of individual freedoms/liberties, as long as they aren't injurious to others, yet others may choose the sefety and soveriegnty of a close interdependent relationship___Still, Choice. At the national/international level, contracts must be re-written in both directions___some decreasing interdependence, where it's actually oppressive/exploitative, and some increasing interdependence, where it's beneficial, if the nation happens to be small and weak. It's kinda like animals and humans, it depends on our Darwinian strenghts/weakeness, which position we choose___sovereignty or interdependence___Again, Choice. Many anchored positions often seem to get one into interpretation troubles, with others, even though we must quite often anchor our positions, even when interpretations wrong them___just the way it is. Clarifications are only reached through successful communications, and grounding our selves in natural "mother wit and common sense". A rock-group I used to listen to stated it this way; "Successful communication, can take you very far". I forget who...
Most are also un-aware there are two dynamically different ethical systems___Manichean and Nicomachean. Manichean is the ethics of the emotions, and Nicomachean is the ethics of reason. Aristotle is the most famous for the Nicomachean ethics, which was actually named after his son, Nicomachus. Manichean ethics was created by the Christian church and philosopers of, some 500 years later, and is as Nietzsche described it; "Morality is one's prejudices, learned by age 18".
I mentioned it because I wasn't aware if you were aware of the fact, about two entirely different systematic ethical systems, functioning in most societies, at once, as well as all the general normally evolved ones, and their related moral systems. I wasn't aware of it myself, until about a month ago, but then again, I haven't studied ethical systems for years, though I knew they both existed, I didn't know one was from Greek philosophy, while the other was from Christian philosophy. I'll take the Greek philosophy one :-)
Hope I haven't run on too much,
Anyway,
Good luck
p.s.
"Good Luck"___The only thing I think I still believe in, but mine's had a long run of not winning the lottery :-)
I'll have all the above better worded later___When it's new, it comes hard...
Yeah, I wrote a reply earlier, but my machine crashed, so here's something of what I had to say. Sarkar's ideas are generally in line with many new western thinkers, such as Herman Daly and Hazel Henderson, two I've already mentioned to you. This link: http://www.proutist-universal.org/ would actually be better to see how he thinks, as it covers more of the social-economic-political points of views. What struck me was the bottom-up approach, as it relates to Obama's ideas. Also his ideas about other top-down and bottom-up failures, i.e., socialism, communalism, communism, bad forms of capitalism. He's also much in line with Gandhi's thinking. My interpretation is probably different than your's or most, since I've studied so much of this already, but I'd like to point out my central observation, which is; "A New Form of Responsibile Co-operative Capitalism". We've already tried all forms to the right and left. It's about time we tried the middle path___Co-operation to find the essential truths of government and markets, instead of settling for "A concensus of the half-blind". I was just impressed that India had such a philosopher of note, with the pragmatic middle ideas, which blend with the directions I think/know the world must go. It's also in line with a new series of documentary on Link TV, The Planet. They laid out four possible directions of Earth, for the future; 1.Star Trek, where we build "Pig-Sty-Scrapers" to house 90 billion inhabitants, through the expansion of present synthetic technology. 2.Mad Max, where the world ends in terror, wars and total collapse. 3.Eco-Topia, where we start to co-operate through becoming more responsible, to build a sensible and proper world. 4.Big-Government/Big-Brother, what I would call totalitarian egalitarianism. Most don't realize 3. and 4. are the same, as any true utopias must have organized control, yet there's a big difference whether such control is voluntary co-operation or not. As I see it, Sarkar's ideas of individual sovereignty and autonomy, achieved through responsible co-operation, offer our best chance, as this is exactly what I've written about lately. Many have preached inter-dependency, but I see the sovereign autonomous route as much more desirable. It's just a matter of transcending the contradictions of the squash/mush-room, sitting atop all our shoulders. This is where eclectic universal conceptualism comes in, i.e., study to achieve the transcended truth, of all ideas...
You know, the only reason I looked up "Eclectic Universalism" was, it was running through my mind, when I awoke Saturday morning. I said, "Well there's a new combination of words, let me see where this leads". Since finding Sarkar and others about eclectic universalism, I had a new vision. The best way is to just state it, and this isn't being sexist. It's just men have been the dominators of societies, and still are in many nations, whereas women have only in recent history attained power and vote. Here it is; "The great man sees the same great man, in all men". Now, at first glance, this may seem contradictory, but it's actually not, even if one wants to take the extreme example of Hitler, as another great man stated; "The worst of society works the public good." Mandeville, I think. Anyway, just think how much the modern world learns from such monsters as Hitler, or even Bush/Cheney. At the highest transcendence levels of vision, all minds meet in absolute non-contradiction___It's our belief systems, attached to our ideas, that prejudice our views. Now, this isn't to say that Hitler wasn't a true monster, which he was, but when transcended to the total eclectic universal view, the world owns all its own monsters, which are often created by un-intended consequences of society's earlier actions. In the case of Hitler, it would be the "Versailles Treaty", where England and the Rest of Europe starved Germany to the brink of death, after WWI___What'd they expect to get___Mickey Mouse?
I've drifted off my point here, but if we could all see "other" as "great-self-self" we'd have far less trouble understanding how to transcend ourselves, to arrive at the ultimate truth necessity. Just take the Republicans and Democrats___One argues for absolute top-down government-economics-social conditions, and the other argues for bottom-up government-economics-social conditions___When both are always simultaneously required___The middle responsible co-operative position. It matters not if the argument is taken back to Paganism/Science; Paganism/Christianity; Christianity/Science, or any opposing contradictions one chooses___The differences are simply generated by the prejudiced belief systems/ideologies, overly attached to the same humans' higher natures of sameness, and sound analytical truths. You know, something the world seems to not know, is the fact that the exact analytical sciences have only "ONE" truth fact answer, for each case investigated___Beliefs must be dropped off, to achieve any exactness, in the true sciences. This doesn't mean one must give up any personal beliefs. It just means that in order to achieve exact scientific truth, a co-operation and responsibility to hard fact is required. This just simply requires temporarily transcending one's personal feelings, beliefs, meta-mind to achieve one side of the higher nature's mind. The higher nature of the natural feeling, responsible, co-operating mind is still in tact to assure all is guided to the "greater good for all" concerned...
What I mean is, most think there are such ideals as true open-ended utopias, ya know, like perfection? Few realize that true perfect liberty is an agreed to, reduced freedom, for the benefit of all concerned___Ya know, like if we all had a radical utopian freedom, we'd all have the liscencious right to do what we pleased, and the law be damned. I mentioned "any true utopias must have organized control" the way I did, to clearify the diffs between open-radical-utopian ideals, that are truly impossible, as verses sensible utopias, of the best possible of worlds, under sensible yet better functioning legal systems, through much higher evolved law systems, and true social justice, than what we presently have. This would be far better organizations of global monetary/law/political and distribution systems, of far less exploitation, subordination and dominance, than now exists. And as to the system I'm relating to, I do not mean one of less freedoms/liberties, we now possess, but one of more, yet most don't realize different organizations of laws/contracts, even more laws in certain areas, while reducing useless laws in other areas, can produce more and better liberty/freedom systems. It's just hard to explain to someone, how you are going to add/change/reduce laws, yet increase freedoms/liberties, yet it's possible. Justice, true global justice, is very hard for most to see, as we've all been brainwashed into the present systems of injustice, yet better freedoms/liberties are achievable, through better organiztions of the very existing systems of contract justice. Remember, even the dollar bill is a contract, and the U.S. Constitution is the "Contract of All Contracts", yet this social contract does not hinder us to change sub-contracts of the major contract, when we realize it's only our false beliefs/ideologies, over-attached to it, now preventing the advancement of better contracts. The real problem enters in the international trade of contracts, where more law would actually create much more freedom, for the local contracts___the money contracts, that benefit the social contract. I could ramble on forever, but I'd have to draw it out for you, to totally understand what I really mean. It's just more international government control over too free a corporate contracts, gives us more local freedom/liberty, automatically. It's just nations have always resisted this concept, because their local allegiance mind tells them, it's more restrictive, when it's truly not. Kinda a paradox, but it's not___It's just a matter of interpretation of understanding the total control/market function of international contracts, as they relate to local social justice contracts, and the expansion of these local justice contracts, as really, they(the local social contracts' freedoms/liberties) expand, by simply reducing the corporate international open-outlaw-contract control, over the entire world's local contracts, by actually increasing government/democracy contract control over them. This can be more easily stated, but I seem to be spinning in circles, trying to explain the simplicity of this complexity, but the truth is that a reduction of nefarious corporate international contract freedoms, is automatically an increase of personal, social contract, and national liberties. The way George Monbiot put it was, "Local democracy is impossible, without international democracy." I guess that's best. We presently have a too free a corporate outlaw international contract system, organized through the corrupt WTO free-trade contract system, related tax havens, and all other foreign exchange near-lawless-contracts, presently controlled by the outlaw corporations' inter-trusts, oppressing the local/national contracts' liberties___This must change. Hope that's clear enough. Let me know if it's not...
To me, the easiest way to understand interdependence is as a social contract concept. I'd just ask the question; "Is the interdependence of global socialist/communist acting, corporate contract dominance/exploitation of local contracts desirable, or is a more sovereign democratic action of local contracts' liberties/freedoms expansion more desirable?" When it comes to the sovereignty/interdependence of persons to persons, in personal relationships, I think that may be one of choice. Myself, I'd always choose sovereignty and independence, i.e., the higher degree of individual freedoms/liberties, as long as they aren't injurious to others, yet others may choose the sefety and soveriegnty of a close interdependent relationship___Still, Choice. At the national/international level, contracts must be re-written in both directions___some decreasing interdependence, where it's actually oppressive/exploitative, and some increasing interdependence, where it's beneficial, if the nation happens to be small and weak. It's kinda like animals and humans, it depends on our Darwinian strenghts/weakeness, which position we choose___sovereignty or interdependence___Again, Choice. Many anchored positions often seem to get one into interpretation troubles, with others, even though we must quite often anchor our positions, even when interpretations wrong them___just the way it is. Clarifications are only reached through successful communications, and grounding our selves in natural "mother wit and common sense". A rock-group I used to listen to stated it this way; "Successful communication, can take you very far". I forget who...
Most are also un-aware there are two dynamically different ethical systems___Manichean and Nicomachean. Manichean is the ethics of the emotions, and Nicomachean is the ethics of reason. Aristotle is the most famous for the Nicomachean ethics, which was actually named after his son, Nicomachus. Manichean ethics was created by the Christian church and philosopers of, some 500 years later, and is as Nietzsche described it; "Morality is one's prejudices, learned by age 18".
I mentioned it because I wasn't aware if you were aware of the fact, about two entirely different systematic ethical systems, functioning in most societies, at once, as well as all the general normally evolved ones, and their related moral systems. I wasn't aware of it myself, until about a month ago, but then again, I haven't studied ethical systems for years, though I knew they both existed, I didn't know one was from Greek philosophy, while the other was from Christian philosophy. I'll take the Greek philosophy one :-)
Hope I haven't run on too much,
Anyway,
Good luck
p.s.
"Good Luck"___The only thing I think I still believe in, but mine's had a long run of not winning the lottery :-)
I'll have all the above better worded later___When it's new, it comes hard...
Monday, October 27, 2008
Media's Missing Intelligent Economists...
In answer as to why the major media stations lack meaningful intelligent economists...
Yes, I used to wonder about the same problem___No highly intelligent economists on the news. Think about it, the reason is simple___Ratings of short sound bites pays the stations more___Economic ideas take time to present. The only place you'll find them at all is Fareed Sakaria at 1:00 pm on Sunday, yet he thinks he's too smart to allow economic intelligence to surface, even when he has them on, although I did see a good piece with the leader of China___Fareed didn't dare take over his conversation. He actually had time to say something___Most interesting points were, capitalization of markets from the bottom up, as Obama has suggested, and that he reads Marcus Aurelius, over and over, at least a 100 times. The show was still too short to delve deep into real world economics. I've already written to all the news-medias with suggestions of major economists and economic ideas to present. The best I've achieved is to get Lou Dobbs to re-book the major economist/historian/journalist, Behar, about the China in Africa exploitation expose. He did it within days of my asking him to. Fareed seems to be to egoistic to pay attention to anyone he doesn't think viable, and he's way off the mark, as pertains to his total knowledge of real world economics.
It's really a political/ideological/belief system problem___Most believe far too trivially about the real world, instead of knowing something about the real world. To me, believers un-knowingly victemize themselves and others into false beliefs, thus the logic needed to truly understand the world, suffers, though I do see the "airplane" of thought slowly landing, the further we advance into this global financial madness, as it really is a belief system problem of "White Global Corporate Tax Haven and Free Trade Market Racism"___i.e., The Rich against the Poor, as always___Wall St. draining Main St. All the problem's in the "Predator Virtual State Tax Havens' Fictitious Wealth Creation", to the tune of $596 Trillion of derivatives securitizations, actually "Embezzling" the $50 Trillion of real global economies' wealth, through market and trade transactions, right in front of everyone's eyes, yet most do not "SEE". This is the main reason I like and back Obama(also backs tax haven and currency reforms), as he has clearly mentioned taking care of "Main Street First" and "Wall St. Last" except in absolute emergency conditions, as we've recently witnessed. Myself, I'd have fixed the "Law System First", since throwing "Good Money" after "Bad Law" is futile___As the "Borg" used to say, on Startrek, "Resistance is futile..." I've written about this often...
Anyway, until the political/economic climate deteriates still further, Resistance to good ideas is paramount, and Action is yet futile, but I'm still trying, and not giving up, as no-one will know the exact moment the resistance level can be breached...
Just a side note on logic, as I recently realized a deeper vision into its functioning; Logic requires "sufficient intelligence" and "efficient analytical judgment" to produce true epistemological knowledge. This is severely lacking in most humans on planet Earth. All I'm stating is the proper and sufficient collection of info, into one's memory conceptualizations, then carefully parsing such ecleticism of information into completely true analyized judgments and knowledge. Most take in far too little information to process anything into any meaningful knowledge systems, thus end only in beliefs/ideologies/dogmas, i.e., mysticisms/metaphysics. Eclecticism(many world views of information) processing solves this problem. Peirce, Veblen and Montegue taught us this, if we study history, most a hundred years ago, yet the colleges easily forget, when entrepreneurial professors want to sell and teach their own new "Tripe Books."
Have faith in the truth eventually being uncovered, as this economic disaster brings us closer to the ground, of true and total reasoning... It's going to be a painful ride, but humanity seems to learn nothing useful, except through such pain, if you catch what I mean... Let's just hope the pain is limited to the emotional, intellectual faculties, and not war...
p.s.
BTW, I'd love to have you write these shows with your suggestions. Maybe with more doing it, we may get some action. And, next month, the world leaders are going to meet in D.C. to try and hammar out real economic solutions. Too bad most will be with bad corporate/tax haven, banker/economists, yet it may give the media a chance to awake from the "lack of knowledge" sleep...
Monday, October 13, 2008
The Entire Global Market Law System Is Broken___Throwing Good Money After Bad Law Makes No Sense…!
"Derivatives' Debt Gobbles Gov. Credit..."
“Triage needed___Band-aids offered…”
"The house of fundamental monetary truths shows the monetary system's spiritual hand of greed controls all life through money. Furthermore, the world is a gambling casino of greed designed and sanctioned by God. Money is the mind of the spirit. The bankers are the dealers. Government is the laws and we are the hands playing the cards of greed. This my friends must change!!!
"Without a full understanding of the functioning of forward markets, all discussion of exchange rate policy must remain seriously deficient." Egon Sohmen
"The general public live in blissful ignorance of the whole subject of finance and of the manner in which the wealth of money lenders is augmented at the public expense by the manipulation of currency and credit." U.
"Overvaluation and undervaluation of currencies is one of the most intricate, most actual, and practically most important chapters of economic science." U.
"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."
All nations must rise to their transcended higher natures of rational realizations, and they must now step into the positions of complete “Market Maker” roles, and design the new market laws necessary, to save the world from complete legal-economic destruction. We can no longer fiddle while Rome burns. This is serious, for the very survival of our species. If we continue to not recognize the true failure of “Pseudo-Free Markets”, and fail to recognize the new roles governments now must play, we will pay a severe price. The last forty years evolution of market, trade, finance and politics have put all nations’ local law and market systems, in extreme conflict with the international contract-law and market systems, to the point where the local systems’ efficiency and viability, has been destroyed by the extreme inefficient “system costs” of the international “Shadow Banking” system, suppressing and eliminating this local viability. Simply said, we have two dynamic law systems in absolute collision___the local and the international___so, we now require major monetary system law reform___FAST and FIRST…!
Where is the fundamental origin of the “Shadow Banking Derivatives” crisis? Is it really in the sub-prime mortgages? No…! The fundamental origin is in the entire foreign exchange, market and trade system, starting in the Nixon administration. The diversion of exchange rate laws, and G.A.T.T. laws, is the origin of all risk market problems___derivatives are mainly risk insurance markets, to protect against exchange rate variances___they existed then as forward markets and contracts, etc. If nations and market players had then been on their toes, they would have foreseen future market problems, with such a flawed, radically, imbalancing law structures’ future collisions potentials, as they had been warned by Paul Einzig, in 1968, when he testified before America’s Senate___They didn’t listen then, no more than they listened to William Spaulding, after WW I, leading us needlessly into `29. Until everyone sees this true fundamental origin of our present problems, to be located in the entire global market law structures, we are just spinning our wheels on ice, trying to throw good money after bad law, to solve a financial problem, which is in FACT, a Law Problem.
Niccolo Machiavelli and John Law would be “real proud” of us right now, but neither are any hero, for us to look up to. At this moment, we should be looking to the true “master minds” of history, instead. My suggestions are Plato’s currency, market and banking system, Benjamin Franklin’s currency, market and banking system, Alexander Hamilton’s currency, market and banking system, J.M. Keynes’ currency, market and banking system, Paul Einzig’s currency, market and banking system, Paul Davidson’s currency, market and banking system, Jane D’Arista’s currency, market and banking system, and even mine. We are in a true currency, market and banking crisis, fully interpreted as the global international financial architecture, which includes all foreign exchanges, markets, trade and political systems of LAW… “All problems are law problems”. No amount of finance thrown at markets will change this absolute fundamental fact of reality. When we have money problems, we have nothing but fundamental Law Problems. So, how long do you suppose it’ll take the nations of the world to awake to the facts of true knowledge? I know one thing, we had soon awake, or we’re all dead. Just as Aristotle stated, “When a nation loses control of its currency, it matters not what the law is”. We are an entire world that has long ago lost control of its currencies, and we can only regain control with new and proper currency, market and trade Laws___Immediately implemented.
Over the past months, I’ve posted articles related to all the above in this blog: http://theawakeningoftheamericamind.blogspot.com/ For full details, I’d suggest reading from the first post back in May, to this one. You can skip the four posts about biology and physics, unless interested. Most of the details are included to what I have above written. If you wish more information, check out my other blog at: http://macromouse.blogspot.com which I’ve been publishing for over five years, or my newest book notes at: http://kondratyev.blogspot.com/
Anyone interested in more information, please e-mail me at: mailto:lloyd.gillespie@gmail.com
“Triage needed___Band-aids offered…”
"The house of fundamental monetary truths shows the monetary system's spiritual hand of greed controls all life through money. Furthermore, the world is a gambling casino of greed designed and sanctioned by God. Money is the mind of the spirit. The bankers are the dealers. Government is the laws and we are the hands playing the cards of greed. This my friends must change!!!
"Without a full understanding of the functioning of forward markets, all discussion of exchange rate policy must remain seriously deficient." Egon Sohmen
"The general public live in blissful ignorance of the whole subject of finance and of the manner in which the wealth of money lenders is augmented at the public expense by the manipulation of currency and credit." U.
"Overvaluation and undervaluation of currencies is one of the most intricate, most actual, and practically most important chapters of economic science." U.
"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."
All nations must rise to their transcended higher natures of rational realizations, and they must now step into the positions of complete “Market Maker” roles, and design the new market laws necessary, to save the world from complete legal-economic destruction. We can no longer fiddle while Rome burns. This is serious, for the very survival of our species. If we continue to not recognize the true failure of “Pseudo-Free Markets”, and fail to recognize the new roles governments now must play, we will pay a severe price. The last forty years evolution of market, trade, finance and politics have put all nations’ local law and market systems, in extreme conflict with the international contract-law and market systems, to the point where the local systems’ efficiency and viability, has been destroyed by the extreme inefficient “system costs” of the international “Shadow Banking” system, suppressing and eliminating this local viability. Simply said, we have two dynamic law systems in absolute collision___the local and the international___so, we now require major monetary system law reform___FAST and FIRST…!
Where is the fundamental origin of the “Shadow Banking Derivatives” crisis? Is it really in the sub-prime mortgages? No…! The fundamental origin is in the entire foreign exchange, market and trade system, starting in the Nixon administration. The diversion of exchange rate laws, and G.A.T.T. laws, is the origin of all risk market problems___derivatives are mainly risk insurance markets, to protect against exchange rate variances___they existed then as forward markets and contracts, etc. If nations and market players had then been on their toes, they would have foreseen future market problems, with such a flawed, radically, imbalancing law structures’ future collisions potentials, as they had been warned by Paul Einzig, in 1968, when he testified before America’s Senate___They didn’t listen then, no more than they listened to William Spaulding, after WW I, leading us needlessly into `29. Until everyone sees this true fundamental origin of our present problems, to be located in the entire global market law structures, we are just spinning our wheels on ice, trying to throw good money after bad law, to solve a financial problem, which is in FACT, a Law Problem.
Niccolo Machiavelli and John Law would be “real proud” of us right now, but neither are any hero, for us to look up to. At this moment, we should be looking to the true “master minds” of history, instead. My suggestions are Plato’s currency, market and banking system, Benjamin Franklin’s currency, market and banking system, Alexander Hamilton’s currency, market and banking system, J.M. Keynes’ currency, market and banking system, Paul Einzig’s currency, market and banking system, Paul Davidson’s currency, market and banking system, Jane D’Arista’s currency, market and banking system, and even mine. We are in a true currency, market and banking crisis, fully interpreted as the global international financial architecture, which includes all foreign exchanges, markets, trade and political systems of LAW… “All problems are law problems”. No amount of finance thrown at markets will change this absolute fundamental fact of reality. When we have money problems, we have nothing but fundamental Law Problems. So, how long do you suppose it’ll take the nations of the world to awake to the facts of true knowledge? I know one thing, we had soon awake, or we’re all dead. Just as Aristotle stated, “When a nation loses control of its currency, it matters not what the law is”. We are an entire world that has long ago lost control of its currencies, and we can only regain control with new and proper currency, market and trade Laws___Immediately implemented.
Over the past months, I’ve posted articles related to all the above in this blog: http://theawakeningoftheamericamind.blogspot.com/ For full details, I’d suggest reading from the first post back in May, to this one. You can skip the four posts about biology and physics, unless interested. Most of the details are included to what I have above written. If you wish more information, check out my other blog at: http://macromouse.blogspot.com which I’ve been publishing for over five years, or my newest book notes at: http://kondratyev.blogspot.com/
Anyone interested in more information, please e-mail me at: mailto:lloyd.gillespie@gmail.com
Saturday, October 11, 2008
Is The World Mature Enough To Handle “Free Money Print” Governments…?
“I’m fully aware of history’s inflations, deflations and hyper-inflations, and all other dynamic market mechanics. I am absolutely, logically analytical… If you don’t think free money prints are viable and required, please read on…”
Egypt, Greece and Rome experienced many models of money, credit and political organizations, through their long histories. Can we learn something new from them…? First, I am a super-macro-economist. I state this to simply distinguish between average macro-economists, who deal with existing academic knowledge systems, and my unique anthropological-macro-economic models, of possible futures, you have not yet heard of. I accept the validity of most economists publishing on Nouriel Roubini’s site, and most of all respect Paul Davidson’s posts, and the extended posts on his site, and the books he has written. Paul’s ideas, if enacted two years ago, may have saved the world from the dire conditions, we now find ourselves in, but due to the evolution of markets into a condition where the “Shadow Banking System Wolf” is fast eating the “Real Banking System Sheep”, new ideas are required.
Globally, the international economic-law system/systems of markets, trade and finance are devouring the local economic-law systems of most all nations, and shortly all nations can not escape the calamity in process. As mentioned by many, ships are sitting in ports, unable to finance loading or unloading. Trucking companies are on the verge of bankruptcy. Rail lines are having trouble obtaining load/unloading financing. China has canceled orders with Australia for steel. Oil tanker traffic is being reduced by the global credit freeze, and on and on it goes, as many have published about already. In short, the system is collapsing___faster than most of the world realizes, and the governments’ plans of this weekend are too wrong, too little, too late___to save the system, without drastic new “Law Ideas”. We can’t keep throwing good money after bad. We must enact new system responsibility laws “FAST” to save the system, or many will starve, freeze and die!
Temporarily, we will shortly have to close the international financial markets and all foreign exchange and book/computer exchanges of, to emplace the required new capital law system controls. The real trade markets must remain open. Financing must be Immediately insured by all governments wishing to receive their required trade goods. An international clearing house must be Immediately set up, just for necessary goods, and winding down of existing, “in process”, real trade contracts, deemed necessary by banks, corporations and governments, where possible finance is allotted. From now on, this will be emergency financing first, for survival purposes, as many markets will further constrict rather rapidly, from here on out, until the new local and international law architectures are emplaced, and enough new hyper-financing is forthcoming…
ALL governments should Now act as “market makers”, and eventually will need to, Insure and re-capitalize all the viable banks left standing, and close those severely impaired. The longer they wait, the more it will cost___better to pay less now, than more later. America should Immediately freeze all real goods prices from rising, yet allow all real goods prices to move down, while wages and profits are allowed to move up. This does not include the stock and commodity markets, as they must be left free to find their own pricing levels. Other nations will eventually have to do the same. Everything, and all markets, can be returned to normal after the time needed to formulate and emplace the new law structures I will put forward. These temporary acts are only required for the time needed to educate and emplace the new regulatory legal architectures. This will take time as, most likely, it will be America leading this new effort, just as it was with Bretton Woods in the `40’s. All nations will eventually have to sign on, and eventually will, when they see the drastic conditions hitting their own nations, as many already have. All will see shortly…
Now, to make these new ideas as short and concise as possible, I’ll use a transposed model of Egypt on America and the modern world. How did Egypt last almost 5,000 years? Let’s assume she used “Tally-board Capitalism”. What is it? Nothing other than set prices, as wages and profits rise. How did they finance such dynamics? Just as Greece and Rome did___Plunder of satellite areas and empires. But, we are civilized, so how can we transpose Egypt’s credit and financial system on America, and the world, also, without the stupidity of domination and war? The dynamic mechanics of Egypt’s credit and financing through plunder, can be comparatively transposed into the modern world through a higher understanding of our own credit, banking and printing press dynamics, which most, if not everybody, has not yet considered. The reason you will listen to me is the fact that “Derivatives’ Casino Capitalism” can never again be set up on the old plan, due to the fact, far too many people have learned how to be “Wolves” devouring “Sheep”, with global computer driven trades___Nor would we ever want to set up such an ill-fated, over-leveraged, gambling casino again___At least not any sane-minded people...
All we need to use “Crude Printing” to replace Egypt’s “Tally-board Capitalism”, is a proper inflation/deflation controlling law system architecture, based on the efficient necessity, imperative of responsibility, yet fully grounded in real “New Law”. This simply requires our full understanding of the fractional reserve banking system’s expansion to “Triple Entry Banking”, “Internal Exchange Clearing” and its related “Private/Public Enterprise 20% P.X. System” of new “Marshall’s Units of Production” standard laws, to control inflation/deflation internally, no matter how much pressure is put on our currency, by foreign nations. This system is either feasible multilaterally or unilaterally/autonomously, which fully respects the sovereignty of America, and all nations concerned. No matter what other nations attempt to price our currency at, we maintain our own internal and external values, and export and import as needed, after law system implementation, by being able to export real goods to receive other nations’ currencies, when currency is devalued by others, with no effect on our prices; and buy other nations’ currencies with exports, when our currency is revalued by others, with our print ability to export, no matter where the external value may be set, yet this system does not set in play the currency competition witnessed in the `30’s, due to the fact of its superior functioning, where all nations will be more than willing to adopt such an extremely efficient operating a system, to enhance their own nation’s superior health and survival. The “New Law System” must be written with “Dynamic Sliding Time Scale Laws”, of change, that benefit not only America, but all other nations of the entire world. Paul Davidson’s ICMU http://econ.bus.utk.edu/faculty/davidson/cambridgepaper.pdf works very close to this system, is better known, and can also be implemented along with my system, yet my system can be used better in the dire emergency conditions we now find our condition. Time is of the essence…
A better, yet not fully complete article of my, Plato’s, Benjamin Franklin’s, and Paul Davidson’s systems is available at this link: http://theawakeningoftheamericamind.blogspot.com/2008/09/lets-take-higher-road.html
Articles and ideas I’ve been posting over the last five years are available at this link: http://macromouse.blogspot.com/
Hope to see you soon, in the new world…
p.s.
...and I also meant to have the gov. "market maker", also perform all the refinancing backing for the banks, market and citizens of lost homes... Big price-tag___but better to pay less now, than much more later...
Better get used to using the printing press___It's about time to figure a law system to use it responsibly, yet thoroughly, i.e., prices down while wages and profits increase___It Is Possible... A New Model of Global Credit Productivity...
Even possible autonomously, if necessary...
Egypt, Greece and Rome experienced many models of money, credit and political organizations, through their long histories. Can we learn something new from them…? First, I am a super-macro-economist. I state this to simply distinguish between average macro-economists, who deal with existing academic knowledge systems, and my unique anthropological-macro-economic models, of possible futures, you have not yet heard of. I accept the validity of most economists publishing on Nouriel Roubini’s site, and most of all respect Paul Davidson’s posts, and the extended posts on his site, and the books he has written. Paul’s ideas, if enacted two years ago, may have saved the world from the dire conditions, we now find ourselves in, but due to the evolution of markets into a condition where the “Shadow Banking System Wolf” is fast eating the “Real Banking System Sheep”, new ideas are required.
Globally, the international economic-law system/systems of markets, trade and finance are devouring the local economic-law systems of most all nations, and shortly all nations can not escape the calamity in process. As mentioned by many, ships are sitting in ports, unable to finance loading or unloading. Trucking companies are on the verge of bankruptcy. Rail lines are having trouble obtaining load/unloading financing. China has canceled orders with Australia for steel. Oil tanker traffic is being reduced by the global credit freeze, and on and on it goes, as many have published about already. In short, the system is collapsing___faster than most of the world realizes, and the governments’ plans of this weekend are too wrong, too little, too late___to save the system, without drastic new “Law Ideas”. We can’t keep throwing good money after bad. We must enact new system responsibility laws “FAST” to save the system, or many will starve, freeze and die!
Temporarily, we will shortly have to close the international financial markets and all foreign exchange and book/computer exchanges of, to emplace the required new capital law system controls. The real trade markets must remain open. Financing must be Immediately insured by all governments wishing to receive their required trade goods. An international clearing house must be Immediately set up, just for necessary goods, and winding down of existing, “in process”, real trade contracts, deemed necessary by banks, corporations and governments, where possible finance is allotted. From now on, this will be emergency financing first, for survival purposes, as many markets will further constrict rather rapidly, from here on out, until the new local and international law architectures are emplaced, and enough new hyper-financing is forthcoming…
ALL governments should Now act as “market makers”, and eventually will need to, Insure and re-capitalize all the viable banks left standing, and close those severely impaired. The longer they wait, the more it will cost___better to pay less now, than more later. America should Immediately freeze all real goods prices from rising, yet allow all real goods prices to move down, while wages and profits are allowed to move up. This does not include the stock and commodity markets, as they must be left free to find their own pricing levels. Other nations will eventually have to do the same. Everything, and all markets, can be returned to normal after the time needed to formulate and emplace the new law structures I will put forward. These temporary acts are only required for the time needed to educate and emplace the new regulatory legal architectures. This will take time as, most likely, it will be America leading this new effort, just as it was with Bretton Woods in the `40’s. All nations will eventually have to sign on, and eventually will, when they see the drastic conditions hitting their own nations, as many already have. All will see shortly…
Now, to make these new ideas as short and concise as possible, I’ll use a transposed model of Egypt on America and the modern world. How did Egypt last almost 5,000 years? Let’s assume she used “Tally-board Capitalism”. What is it? Nothing other than set prices, as wages and profits rise. How did they finance such dynamics? Just as Greece and Rome did___Plunder of satellite areas and empires. But, we are civilized, so how can we transpose Egypt’s credit and financial system on America, and the world, also, without the stupidity of domination and war? The dynamic mechanics of Egypt’s credit and financing through plunder, can be comparatively transposed into the modern world through a higher understanding of our own credit, banking and printing press dynamics, which most, if not everybody, has not yet considered. The reason you will listen to me is the fact that “Derivatives’ Casino Capitalism” can never again be set up on the old plan, due to the fact, far too many people have learned how to be “Wolves” devouring “Sheep”, with global computer driven trades___Nor would we ever want to set up such an ill-fated, over-leveraged, gambling casino again___At least not any sane-minded people...
All we need to use “Crude Printing” to replace Egypt’s “Tally-board Capitalism”, is a proper inflation/deflation controlling law system architecture, based on the efficient necessity, imperative of responsibility, yet fully grounded in real “New Law”. This simply requires our full understanding of the fractional reserve banking system’s expansion to “Triple Entry Banking”, “Internal Exchange Clearing” and its related “Private/Public Enterprise 20% P.X. System” of new “Marshall’s Units of Production” standard laws, to control inflation/deflation internally, no matter how much pressure is put on our currency, by foreign nations. This system is either feasible multilaterally or unilaterally/autonomously, which fully respects the sovereignty of America, and all nations concerned. No matter what other nations attempt to price our currency at, we maintain our own internal and external values, and export and import as needed, after law system implementation, by being able to export real goods to receive other nations’ currencies, when currency is devalued by others, with no effect on our prices; and buy other nations’ currencies with exports, when our currency is revalued by others, with our print ability to export, no matter where the external value may be set, yet this system does not set in play the currency competition witnessed in the `30’s, due to the fact of its superior functioning, where all nations will be more than willing to adopt such an extremely efficient operating a system, to enhance their own nation’s superior health and survival. The “New Law System” must be written with “Dynamic Sliding Time Scale Laws”, of change, that benefit not only America, but all other nations of the entire world. Paul Davidson’s ICMU http://econ.bus.utk.edu/faculty/davidson/cambridgepaper.pdf works very close to this system, is better known, and can also be implemented along with my system, yet my system can be used better in the dire emergency conditions we now find our condition. Time is of the essence…
A better, yet not fully complete article of my, Plato’s, Benjamin Franklin’s, and Paul Davidson’s systems is available at this link: http://theawakeningoftheamericamind.blogspot.com/2008/09/lets-take-higher-road.html
Articles and ideas I’ve been posting over the last five years are available at this link: http://macromouse.blogspot.com/
Hope to see you soon, in the new world…
p.s.
...and I also meant to have the gov. "market maker", also perform all the refinancing backing for the banks, market and citizens of lost homes... Big price-tag___but better to pay less now, than much more later...
Better get used to using the printing press___It's about time to figure a law system to use it responsibly, yet thoroughly, i.e., prices down while wages and profits increase___It Is Possible... A New Model of Global Credit Productivity...
Even possible autonomously, if necessary...
Saturday, September 27, 2008
Friday, Sept. 26 Debate___The Irresponsibility Twins...
NEW Sept 9, The world is at severe risk of a global systemic financial meltdown and a severe global depression, by Nouriel Roubini
NEW Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks: by Nouriel Roubini
The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too: by James K. Galbraith (click features)
Introducing Students to the Generic Terminology of Social Research, by J. Grix
Philosophy of Social Science___Crash Course, by V.F. Hendricks
Descartes, Pascal, and the Epistemology of Mathematics: The Case of the Cycloid, by Douglas M. Jesseph
History and epistemology in mathematics education, by Giorgio T. Bagni, Fulvia Furinghetti, Filippo Spagnolo
SCEPTICISM AND MATHEMATIZATION: PASCAL AND PEIRCE ON MATHEMATICAL EPISTEMOLOGY, by Johannes Lenhard1
"The needs of the many, and the thought-needs of the few..."
Our choice, standing on the American stage of awesome public responsibility, at the most momentous time in history, were two men of laudable personal integrity and responsibility, yet both lacking the “most necessary” responsibility of intellectual economic wisdom, to deal with our nation’s, and the world’s most pressing financial problems, since the great depression. Why would two men of fine personal means have not realized, true political power absolutely requires far more experience, knowledge and wisdom, than good judgment, an intellect of law and political power, by one, and an intellect of military political power, by the other? Why would anyone, either one, especially realizing both have warned for years about America’s coming economic problems, actively waiting in the wings of global financial turmoil, have wanted political power, while never educating themselves to the more than glaringly obvious necessity of economic wisdom required, once this highest office in the land was attained? Why?
This leaves the public having to choose between the lower irresponsibility, of less than fully higher responsible judgments. I just hate to see a choice of less than the best of the best, but this is what we’re left with. To me, this questions the deeper judgments of both candidates, Obama and McCain, leaving us, the public, at the mercy of another election of TV personalities. But to be fair, we do possibly have a higher lesser evil of the two to choose from, than elections of the past. I full well realize no candidate choosing to run less than five years ago, could ever have had the time to educate themselves to the proficiency level of technical economics required, but on the other hand John McCain has been actively desiring and attempting to attain this office over enough time to have educated himself, yet he willingly admits of knowing practically nothing of technical economics, even after serving some thirty plus years in the Senate___This seems to be in-excusable. And, Barack Obama must have had the desire for some time, but is too young to have had the time to fully educate himself to the technical dynamics of economics and finance required for full understanding either, yet at the same time, seems to know and be able to process many of its fundamentals far better than the more politically experienced McCain, and this I see as the most important fundamental of political thought, either possess___Sound judgment.
Though there are many advantages and dis-advantages in both candidates, neither made an issue of either’s irresponsibility to the true intellectual economic responsibility required for the proficient performance of the office at hand. I can understand McCain not making an issue of Obama’s intellectual economic inexperience, as he’s so many times admitted his own lack of economic technical knowledge, but Obama as well, dared not attack McCain’s lack of economic technical experience, in the areas of military, foreign policy and politics, as he himself lacks the full understanding of money’s pre-eminent role in any war politics___Planning, participating in, or completing, of said jobs. So, neither candidate fully realizes the extreme importance of money and finance, on the world stage, when it is truly the primary tool of war and peace alike. This has been my position of both these candidates, from the beginning___Neither possess the intellectual prowess of economic responsibility, over their own irresponsibilities, to warrant either to attain the Office of President of the United States. Yet, we must elect one to that very office. Who is our better choice?
It seems the only quality my judgment is left with is a choice of finding the more “trustworthy” of the inexperience of each. Who do I, or you and I, trust the most to handle what neither of them understand fully? This is the question. Myself, looking back over history for guidance would pick two men to inform my judgment. That would be Alexis de Toqueville and Thorstein Veblen, as Alexis offers the best assessment of democracy’s evolution in general, and American democracy in particular, over the ages, and Veblen offers the best philosophy of a personally irresponsible man, with the highest intellectual responsibility of most any man I ever read. Both offer glimpses into the super-consciousness of people and nations, at some of the highest levels of knowledge possible. Both these candidates could have read these two genius’ of history and economics, to much better understand the mandates of office required, but their handlers seemed to not recognize the importance of the moment, as pertains to the historical and economic responsibilities required, by the office applied for. Both DeToqueville and Veblen clearly warned a world of democracy’s and capitalism’s pitfalls over time, DeToqueville of the personal passions, desires and greedy corrupt motives of people and power groups, and Veblen’s warnings of the shortcomings of the two warring political and social classes, between its class warfares of the egalitarian working classes, and the tribalistic “dog-eat-dog” competition of the leisure classes. IMO, these two books alone, could almost educate a presidential candidate, with deep enough reflection, to practically be able to understand much of national and global economic-political evolution, “iff”, grounded in fundamental efficient necessity of thought. Yet, neither handlers of these two candidates, chose to front them with a finer necessary eco-geo-military-political understanding, than a less than “responsibility of irresponsibility” of self-sovereign spirits. But, upon thoroughly comparing the two, Obama, IMO, comes out on top, due to the fact he understands constitutional law dynamics, general eco-geo-politics, and the “needs of the many”, far better than McCain, who understands not, constitutional law dynamics, or general eco-geo-politics well enough, yet, well understands the “thought-needs of the few”, far too well…
So, do we go with the candidate of “Main St. and the needs of the many”, or the candidate of “Wall St. and the thought-needs of the few”? Notice I’ve stated a difference between “needs and thought-needs”, as thought-needs are not needs, except by intellects who have not yet figured out how to design global economic systems to support all desires, prudently and responsibly, which is certainly possible. I want a candidate who will lead us toward the “needs of the many”, and I think Barack Obama fills that bill, without question. This is just a scientific fact of simple math... If we all learn to add, we’d all choose Obama…
P.S.
To connect the missing technically explained comment, from this post, please read the rest of my blog, beginning in May, and especially the post before this one. Skip the four posts about physics and biology, unless interested…
Monday: Call to Stop Paulson's Plunder
(1) Call your Representatives and Senators at 800-473-6711 or 202-224-3121 and say No Bailout!
(2) Email them too and tell your friends:
http://democrats.com/stop-paulsons-plunder
After a week of high-drama negotiations, Congress and Hank Paulson issued Bailout version 1.1, which is just the original Paulson pig with a lot of lipstick.
Republicans say the deal will be profitable for taxpayers, but they are lying - just as they did about the invasion of Iraq producing lower gas prices. It's a lie because Paulson has full power to pay too much for the securities and he will because his real goal is a bailout of bank executives and shareholders with our money - a massive ($2,333 per person!) transfer of wealth from the poor and middle class to the rich.
Democrats say they got oversight, accountability, and limits on executive compensation but each of these provisions is so full of Republican-written loopholes that they are meaningless - just like all other restrictions imposed on the Bush Administration, from Iraq to wiretapping. And that's before Bush simply negates any restrictions he doesn't like with one of his unconstitutional (and hence impeachable) signing statements.
So our answer remains ABSOLUTELY NOT.
The House will vote on Monday and the Senate will vote on Wednesday.
So call your Senators and Representative right now to say "No $700 Billion Bailout for Wall Street" - dial the Capitol switchboard at 800-473-6711 or 202-224-3121 or dial direct using the instant phone lookup on the right side of http://usalone.com
And if you have not e mailed your Senators and Representative , please do it now:
http://www.democrats.com/stop-paulsons-plunder
Find more information and comment here:
http://www.democrats.com/still-no-bailout
Thanks for all you do!
NEW Sept. 29, The US and global financial crisis is becoming much more severe in spite of the Treasury rescue plan. The risk of a total systemic meltdown is now as high as ever...
by Nouriel Roubini | Sep 29, 2008
It is obvious that the current financial crisis is becoming more severe in spite of the Treasury rescue plan (or maybe because of it as this plan it totally flawed). The severe strains in financial markets (money markets, credit markets, stock markets, CDS and derivative markets) are becoming more severe rather than less severe in spite of the nuclear option (after the Fannie and Freddie $200 billion bazooka bailout failed to restore confidence) of a $700 billion package: interbank spreads are widening (TED spread, swap spreads, Libo-OIS spread) and are at level never seen before; credit spreads (such as junk bond yield spreads relative to Treasuries are widening to new peaks; short-term Treasury yields are going back to near zero levels as there is flight to safety; CDS spread for financial institutions are rising to extreme levels (Morgan Stanley ones at 1200 last week) as the ban on shorting of financial stock has moved the pressures on financial firms to the CDS market; and stock markets around the world have reacted very negatively to this rescue package (US market are down about 3% this morning at their opening).
Let me explain now in more detail why we are now back to the risk of a total systemic financial meltdown…
It is no surprise as financial institutions in the US and around advanced economies are going bust: in the US the latest victims were WaMu (the largest US S&L) and today Wachovia (the sixth largest US bank); in the UK after Northern Rock and the acquisition of HBOS by Lloyds TSB you now have the bust and rescue of B&B; in Belgium you had Fortis going bust and being rescued over the weekend; in German HRE, a major financial institution is also near bust and in need of a government rescue. So this is not just a US financial crisis; it is a global financial crisis hitting institutions in the US, UK, Eurozone and other advanced economies (Iceland, Australia, New Zealand, Canada etc.).
And the strains in financial markets – especially short term interbank markets - are becoming more severe in spite of the Fed and other central banks having literally injected about $300 billion of liquidity in the financial system last week alone including massive liquidity lending to Morgan and Goldman. In a solvency crisis and credit crisis that goes well beyond illiquidity no one is lending to counterparties as no one trusts any counterparty (even the safest ones) and everyone is hoarding the liquidity that is injected by central banks. And since this liquidity goes only to banks and major broker dealers the rest of the shadow banking system has not access to this liquidity as the credit transmission mechanisms is blocked.
After the bust of Bear and Lehman and the merger of Merrill with BofA I suggested that Morgan Stanley and Goldman Sachs should also merge with a large financial institution that has a large base of insured deposits so as to avoid a run on their overnite liabilities. Instead Morgan and Goldman went for the cosmetic approach of converting into bank holding companies as a way to get further liquidity support – and regulation as banks – of the Fed and as a way to acquire safe deposits. But neither institution can create in a short time a franchise of branches and neither one has the time and resources to acquire smaller banks. And the injection of $8 b of Japanese capital into Morgan and $5 b of capital from Buffett into Goldman is a drop in the ocean as both institutions need much more capital. Thus, the gambit of converting into bank while not being banks yet has not worked and the run against them has accelerated in the last week: Morgan’s CDS spread went through the roof on Friday to over 1200 and the firm has already lost over a third of its hedge funds clients together with their highly profitable prime brokering business (this is really a kiss of death for Morgan); and the coming roll-off of the interbank lines to Morgan would seal its collapse. Even Goldman Sachs is under severe stress losing business, losing money, experiencing a severe widening of its CDS spreads and at risk of losing most of its values most of its lines of business (including trading) are now losing money.
Both institutions are highly recommended to stop dithering and playing for time as delay will be destructive: they should merge now with a large foreign financial institution as no US institution is sound enough and large enough to be a sound merger partner. If Mack and Blankfein don’t want to end up like Fuld they should do today a Thain and merge as fast as they can with another large commercial banks. Maybe Mitsubishi and a bunch of Japanese life insurers can take over Morgan; in Europe Barclays has its share of capital trouble and has just swallowed part of Lehman; while most other UK banks are too weak to take over Goldman. The only institution sound enough to swallow Goldman may be HSBC. Or maybe Nomura in Japan should make a bid for Goldman. Either way Mack and Blankfein should sell at a major discount of current price their firm before they end up like Bear and be offered in a few weeks a couple of bucks a share for their faltering operation. And the Fed and Treasury should tell them to hurry up as they are both much bigger than Bear or Lehman and their collapse would have severe systemic effects.
When investors don’t trust any more even venerable institutions such as Morgan Stanley and Goldman Sachs you know that the financial crisis is as severe as ever and the fear of collapse of counterparties does not spare anyone. When a nuclear option of a monster $700 billion rescue plan is not even able to rally stock markets (as they are all in free fall today) you know this is a global crisis of confidence in the financial system. We were literally close to a total meltdown of the system on Wednesday (and Thursday morning) two weeks ago when the $85 b bailout of AIG led to a 5% fall in US stock markets (instead of a rally). Then the US authorities went for the nuclear option of the $700 billion plan as a way to avoid the meltdown together with bans on short sales, a guarantee of money market funds and an injection of over $300 billion in the financial system. Now the prospect of this plan passing (but there is some lingering deal risk the votes in the House are not certain) -as well as the other massive policy actions taken to stop short selling “speculation” and support interbank markets and money market funds - is not sufficient to make the markets rally as there is a generalized loss of confidence in financial markets and in financial institutions that no policy action seem to be able to control.
The next step of this panic could become the mother of all bank runs, i.e. a run on the trillion dollar plus of the cross border short-term interbank liabilities of the US banking and financial system as foreign banks as starting to worry about the safety of their liquid exposures to US financial institutions; such a silent cross border bank run has already started as foreign banks are worried about the solvency of US banks and are starting to reduce their exposure. And if this run accelerates - as it may now - a total meltdown of the US financial system could occur. We are thus now in a generalized panic mode and back to the risk of a systemic meltdown of the entire financial system. And US and foreign policy authorities seem to be clueless about what needs to be done next. Maybe they should today start with a coordinated 100 bps reduction in policy rates in all the major economies in the world to show that they are starting to seriously recognize and address this rapidly worsening financial crisis.
my response...
The "Shadow Banking System's" mess...
Nouriel, seriously, where do you stand on closing the international financial side of the foreign exchanges, and going to stringent capital controls, to save some of what's left? Just to give some breathing room, so real economists can work out the best route to salvage what's left of the global mess... The entire "Shadow Banking System" needs to be rolled back into the real banking systems of all economies, but no-one's able to price it___The problem___No Time! Due to the fact "no-one on earth" can truly figure derivatives valuations, as in Lehman's possible 10T derivatives exposure case, for an estimated two years hence, to wind down or back into the real system___drastic measures are certainly necessary___Don't you think...?
Lloyd Gillespie
NEW Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks: by Nouriel Roubini
The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too: by James K. Galbraith (click features)
Introducing Students to the Generic Terminology of Social Research, by J. Grix
Philosophy of Social Science___Crash Course, by V.F. Hendricks
Descartes, Pascal, and the Epistemology of Mathematics: The Case of the Cycloid, by Douglas M. Jesseph
History and epistemology in mathematics education, by Giorgio T. Bagni, Fulvia Furinghetti, Filippo Spagnolo
SCEPTICISM AND MATHEMATIZATION: PASCAL AND PEIRCE ON MATHEMATICAL EPISTEMOLOGY, by Johannes Lenhard1
"The needs of the many, and the thought-needs of the few..."
Our choice, standing on the American stage of awesome public responsibility, at the most momentous time in history, were two men of laudable personal integrity and responsibility, yet both lacking the “most necessary” responsibility of intellectual economic wisdom, to deal with our nation’s, and the world’s most pressing financial problems, since the great depression. Why would two men of fine personal means have not realized, true political power absolutely requires far more experience, knowledge and wisdom, than good judgment, an intellect of law and political power, by one, and an intellect of military political power, by the other? Why would anyone, either one, especially realizing both have warned for years about America’s coming economic problems, actively waiting in the wings of global financial turmoil, have wanted political power, while never educating themselves to the more than glaringly obvious necessity of economic wisdom required, once this highest office in the land was attained? Why?
This leaves the public having to choose between the lower irresponsibility, of less than fully higher responsible judgments. I just hate to see a choice of less than the best of the best, but this is what we’re left with. To me, this questions the deeper judgments of both candidates, Obama and McCain, leaving us, the public, at the mercy of another election of TV personalities. But to be fair, we do possibly have a higher lesser evil of the two to choose from, than elections of the past. I full well realize no candidate choosing to run less than five years ago, could ever have had the time to educate themselves to the proficiency level of technical economics required, but on the other hand John McCain has been actively desiring and attempting to attain this office over enough time to have educated himself, yet he willingly admits of knowing practically nothing of technical economics, even after serving some thirty plus years in the Senate___This seems to be in-excusable. And, Barack Obama must have had the desire for some time, but is too young to have had the time to fully educate himself to the technical dynamics of economics and finance required for full understanding either, yet at the same time, seems to know and be able to process many of its fundamentals far better than the more politically experienced McCain, and this I see as the most important fundamental of political thought, either possess___Sound judgment.
Though there are many advantages and dis-advantages in both candidates, neither made an issue of either’s irresponsibility to the true intellectual economic responsibility required for the proficient performance of the office at hand. I can understand McCain not making an issue of Obama’s intellectual economic inexperience, as he’s so many times admitted his own lack of economic technical knowledge, but Obama as well, dared not attack McCain’s lack of economic technical experience, in the areas of military, foreign policy and politics, as he himself lacks the full understanding of money’s pre-eminent role in any war politics___Planning, participating in, or completing, of said jobs. So, neither candidate fully realizes the extreme importance of money and finance, on the world stage, when it is truly the primary tool of war and peace alike. This has been my position of both these candidates, from the beginning___Neither possess the intellectual prowess of economic responsibility, over their own irresponsibilities, to warrant either to attain the Office of President of the United States. Yet, we must elect one to that very office. Who is our better choice?
It seems the only quality my judgment is left with is a choice of finding the more “trustworthy” of the inexperience of each. Who do I, or you and I, trust the most to handle what neither of them understand fully? This is the question. Myself, looking back over history for guidance would pick two men to inform my judgment. That would be Alexis de Toqueville and Thorstein Veblen, as Alexis offers the best assessment of democracy’s evolution in general, and American democracy in particular, over the ages, and Veblen offers the best philosophy of a personally irresponsible man, with the highest intellectual responsibility of most any man I ever read. Both offer glimpses into the super-consciousness of people and nations, at some of the highest levels of knowledge possible. Both these candidates could have read these two genius’ of history and economics, to much better understand the mandates of office required, but their handlers seemed to not recognize the importance of the moment, as pertains to the historical and economic responsibilities required, by the office applied for. Both DeToqueville and Veblen clearly warned a world of democracy’s and capitalism’s pitfalls over time, DeToqueville of the personal passions, desires and greedy corrupt motives of people and power groups, and Veblen’s warnings of the shortcomings of the two warring political and social classes, between its class warfares of the egalitarian working classes, and the tribalistic “dog-eat-dog” competition of the leisure classes. IMO, these two books alone, could almost educate a presidential candidate, with deep enough reflection, to practically be able to understand much of national and global economic-political evolution, “iff”, grounded in fundamental efficient necessity of thought. Yet, neither handlers of these two candidates, chose to front them with a finer necessary eco-geo-military-political understanding, than a less than “responsibility of irresponsibility” of self-sovereign spirits. But, upon thoroughly comparing the two, Obama, IMO, comes out on top, due to the fact he understands constitutional law dynamics, general eco-geo-politics, and the “needs of the many”, far better than McCain, who understands not, constitutional law dynamics, or general eco-geo-politics well enough, yet, well understands the “thought-needs of the few”, far too well…
So, do we go with the candidate of “Main St. and the needs of the many”, or the candidate of “Wall St. and the thought-needs of the few”? Notice I’ve stated a difference between “needs and thought-needs”, as thought-needs are not needs, except by intellects who have not yet figured out how to design global economic systems to support all desires, prudently and responsibly, which is certainly possible. I want a candidate who will lead us toward the “needs of the many”, and I think Barack Obama fills that bill, without question. This is just a scientific fact of simple math... If we all learn to add, we’d all choose Obama…
P.S.
To connect the missing technically explained comment, from this post, please read the rest of my blog, beginning in May, and especially the post before this one. Skip the four posts about physics and biology, unless interested…
Monday: Call to Stop Paulson's Plunder
(1) Call your Representatives and Senators at 800-473-6711 or 202-224-3121 and say No Bailout!
(2) Email them too and tell your friends:
http://democrats.com/stop-paulsons-plunder
After a week of high-drama negotiations, Congress and Hank Paulson issued Bailout version 1.1, which is just the original Paulson pig with a lot of lipstick.
Republicans say the deal will be profitable for taxpayers, but they are lying - just as they did about the invasion of Iraq producing lower gas prices. It's a lie because Paulson has full power to pay too much for the securities and he will because his real goal is a bailout of bank executives and shareholders with our money - a massive ($2,333 per person!) transfer of wealth from the poor and middle class to the rich.
Democrats say they got oversight, accountability, and limits on executive compensation but each of these provisions is so full of Republican-written loopholes that they are meaningless - just like all other restrictions imposed on the Bush Administration, from Iraq to wiretapping. And that's before Bush simply negates any restrictions he doesn't like with one of his unconstitutional (and hence impeachable) signing statements.
So our answer remains ABSOLUTELY NOT.
The House will vote on Monday and the Senate will vote on Wednesday.
So call your Senators and Representative right now to say "No $700 Billion Bailout for Wall Street" - dial the Capitol switchboard at 800-473-6711 or 202-224-3121 or dial direct using the instant phone lookup on the right side of http://usalone.com
And if you have not e mailed your Senators and Representative , please do it now:
http://www.democrats.com/stop-paulsons-plunder
Find more information and comment here:
http://www.democrats.com/still-no-bailout
Thanks for all you do!
NEW Sept. 29, The US and global financial crisis is becoming much more severe in spite of the Treasury rescue plan. The risk of a total systemic meltdown is now as high as ever...
by Nouriel Roubini | Sep 29, 2008
It is obvious that the current financial crisis is becoming more severe in spite of the Treasury rescue plan (or maybe because of it as this plan it totally flawed). The severe strains in financial markets (money markets, credit markets, stock markets, CDS and derivative markets) are becoming more severe rather than less severe in spite of the nuclear option (after the Fannie and Freddie $200 billion bazooka bailout failed to restore confidence) of a $700 billion package: interbank spreads are widening (TED spread, swap spreads, Libo-OIS spread) and are at level never seen before; credit spreads (such as junk bond yield spreads relative to Treasuries are widening to new peaks; short-term Treasury yields are going back to near zero levels as there is flight to safety; CDS spread for financial institutions are rising to extreme levels (Morgan Stanley ones at 1200 last week) as the ban on shorting of financial stock has moved the pressures on financial firms to the CDS market; and stock markets around the world have reacted very negatively to this rescue package (US market are down about 3% this morning at their opening).
Let me explain now in more detail why we are now back to the risk of a total systemic financial meltdown…
It is no surprise as financial institutions in the US and around advanced economies are going bust: in the US the latest victims were WaMu (the largest US S&L) and today Wachovia (the sixth largest US bank); in the UK after Northern Rock and the acquisition of HBOS by Lloyds TSB you now have the bust and rescue of B&B; in Belgium you had Fortis going bust and being rescued over the weekend; in German HRE, a major financial institution is also near bust and in need of a government rescue. So this is not just a US financial crisis; it is a global financial crisis hitting institutions in the US, UK, Eurozone and other advanced economies (Iceland, Australia, New Zealand, Canada etc.).
And the strains in financial markets – especially short term interbank markets - are becoming more severe in spite of the Fed and other central banks having literally injected about $300 billion of liquidity in the financial system last week alone including massive liquidity lending to Morgan and Goldman. In a solvency crisis and credit crisis that goes well beyond illiquidity no one is lending to counterparties as no one trusts any counterparty (even the safest ones) and everyone is hoarding the liquidity that is injected by central banks. And since this liquidity goes only to banks and major broker dealers the rest of the shadow banking system has not access to this liquidity as the credit transmission mechanisms is blocked.
After the bust of Bear and Lehman and the merger of Merrill with BofA I suggested that Morgan Stanley and Goldman Sachs should also merge with a large financial institution that has a large base of insured deposits so as to avoid a run on their overnite liabilities. Instead Morgan and Goldman went for the cosmetic approach of converting into bank holding companies as a way to get further liquidity support – and regulation as banks – of the Fed and as a way to acquire safe deposits. But neither institution can create in a short time a franchise of branches and neither one has the time and resources to acquire smaller banks. And the injection of $8 b of Japanese capital into Morgan and $5 b of capital from Buffett into Goldman is a drop in the ocean as both institutions need much more capital. Thus, the gambit of converting into bank while not being banks yet has not worked and the run against them has accelerated in the last week: Morgan’s CDS spread went through the roof on Friday to over 1200 and the firm has already lost over a third of its hedge funds clients together with their highly profitable prime brokering business (this is really a kiss of death for Morgan); and the coming roll-off of the interbank lines to Morgan would seal its collapse. Even Goldman Sachs is under severe stress losing business, losing money, experiencing a severe widening of its CDS spreads and at risk of losing most of its values most of its lines of business (including trading) are now losing money.
Both institutions are highly recommended to stop dithering and playing for time as delay will be destructive: they should merge now with a large foreign financial institution as no US institution is sound enough and large enough to be a sound merger partner. If Mack and Blankfein don’t want to end up like Fuld they should do today a Thain and merge as fast as they can with another large commercial banks. Maybe Mitsubishi and a bunch of Japanese life insurers can take over Morgan; in Europe Barclays has its share of capital trouble and has just swallowed part of Lehman; while most other UK banks are too weak to take over Goldman. The only institution sound enough to swallow Goldman may be HSBC. Or maybe Nomura in Japan should make a bid for Goldman. Either way Mack and Blankfein should sell at a major discount of current price their firm before they end up like Bear and be offered in a few weeks a couple of bucks a share for their faltering operation. And the Fed and Treasury should tell them to hurry up as they are both much bigger than Bear or Lehman and their collapse would have severe systemic effects.
When investors don’t trust any more even venerable institutions such as Morgan Stanley and Goldman Sachs you know that the financial crisis is as severe as ever and the fear of collapse of counterparties does not spare anyone. When a nuclear option of a monster $700 billion rescue plan is not even able to rally stock markets (as they are all in free fall today) you know this is a global crisis of confidence in the financial system. We were literally close to a total meltdown of the system on Wednesday (and Thursday morning) two weeks ago when the $85 b bailout of AIG led to a 5% fall in US stock markets (instead of a rally). Then the US authorities went for the nuclear option of the $700 billion plan as a way to avoid the meltdown together with bans on short sales, a guarantee of money market funds and an injection of over $300 billion in the financial system. Now the prospect of this plan passing (but there is some lingering deal risk the votes in the House are not certain) -as well as the other massive policy actions taken to stop short selling “speculation” and support interbank markets and money market funds - is not sufficient to make the markets rally as there is a generalized loss of confidence in financial markets and in financial institutions that no policy action seem to be able to control.
The next step of this panic could become the mother of all bank runs, i.e. a run on the trillion dollar plus of the cross border short-term interbank liabilities of the US banking and financial system as foreign banks as starting to worry about the safety of their liquid exposures to US financial institutions; such a silent cross border bank run has already started as foreign banks are worried about the solvency of US banks and are starting to reduce their exposure. And if this run accelerates - as it may now - a total meltdown of the US financial system could occur. We are thus now in a generalized panic mode and back to the risk of a systemic meltdown of the entire financial system. And US and foreign policy authorities seem to be clueless about what needs to be done next. Maybe they should today start with a coordinated 100 bps reduction in policy rates in all the major economies in the world to show that they are starting to seriously recognize and address this rapidly worsening financial crisis.
my response...
The "Shadow Banking System's" mess...
Nouriel, seriously, where do you stand on closing the international financial side of the foreign exchanges, and going to stringent capital controls, to save some of what's left? Just to give some breathing room, so real economists can work out the best route to salvage what's left of the global mess... The entire "Shadow Banking System" needs to be rolled back into the real banking systems of all economies, but no-one's able to price it___The problem___No Time! Due to the fact "no-one on earth" can truly figure derivatives valuations, as in Lehman's possible 10T derivatives exposure case, for an estimated two years hence, to wind down or back into the real system___drastic measures are certainly necessary___Don't you think...?
Lloyd Gillespie
Tuesday, September 23, 2008
Let’s Take A Higher Road…
For over 2500 years, and possibly more, the world has been debating personal, social and economic conditions, from a less than ideal perspective of inter-tribal differences. Can we possibly transcend our tribal allegiances of special interests, whether labor and workers, of the egalitarian vein, on the left, or business and corporations, of the competition and profit vein, on the right, and find a higher road? I think we can, with, “A transcendent theory of responsible semi-philanthropic government”. I mention semi-philanthropic government, in no small sense, as when we truly address our global condition over the last thirty years, we’ve actually evolved from a system of capitalist free-markets, to a more integrated system of Marxist/socialist/capitalism, with all our socialization of global finance and trade, to the tune of trillions of dollars of national debts, and especially now, with the massive socialist bail-out packages being put on the table, which will further socialize the already over-socialized system.
All we have do is ask, “Have we acted responsibly?” My answer is, “Absolutely not!” From Nixon, through Reagan, Bush I, Clinton and Bush II, we’ve seen and been nothing but irresponsible, to our fundamental ideals, of sound government and finance. How could we have lost our way so badly? My answer is, we spent so much time fighting and warding off Marxism, socialism and communism, our simple fears of, we actually forgot to build further on our fundamental ideals, and instead, adopted financial evolution by accident, and hap-hazard in-attention. Both political parties allowed the policies and philosophies of the moment, to control our destinies down roads any sane nation, would have never traveled, with irrational de-regulations of other-wise sound markets and trade, to massive profligate increases of finally un-repayable debts. So, now we arrive at the grid-locked arguments of two special interest groups, with their un-resolvable differences.
Whether we look at this enigma from the perspective of social responsibility, or economic survival, we must develop a new and transcended philosophy of government, economics and politics, capable of bridging these diverse differences. When I mention “A transcendent theory of responsible semi-philanthropic government”, it no longer looks utopian, as it once did, as it’s actually the forms of governments, many nations of the OECD capitalist world, have now adopted, so it allows us to discuss such a topic, with a new sense of responsibility, as opposed to our present profligate irresponsibility. Now, what would such a transcendent vision look like? I’ll state it bluntly first and explain later, “Governments should use money, to reduce prices, and increase wages and profits”. Now, at this moment, all educated people would yell and scream, “This is impossible”, yet I say, “No, it is not.”, and I have more than one proof of its full possibility. Let me here enter just one of the transcended ideas of responsibility, first offered by Plato, some 2400 years ago:
“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”.
Also, if you go back to one of my earlier posts at: http://theawakeningoftheamericamind.blogspot.com/2008/07/essay-on-paper-currencyproposing-new.html where you will see a similar transcendent idea put forward by our very own Benjamin Franklin. And here again is the same transcendent idea of Paul Einzig and J.M. Keynes, put forward by Paul Davidson:
“Elsewhere(Davidson) I have developed in detail a proposal for reforming the entire international payments system via an international clearing union that provides for capital controls and other necessary and sufficient conditions to permit the establishment of a golden age in the 21st century. The main proviso of my proposal are:
1. The unit of account and ultimate reserve asset for international liquidity is the International Money Clearing Unit (IMCU). All IMCU's are held only by central banks, not by the public.
2. Each nation's central bank is committed to guarantee one way convertibility from IMCU deposits at the clearing union to its domestic money. Each central bank will set its own rules regarding making available foreign monies (through IMCU clearing transactions) to its own bankers and private sector residents(21). Ultimately, all major private international transactions clear between central banks' accounts in the books of the international clearing institution.
3. The exchange rate between the domestic currency and the IMCU is set initially by each nation -- just as it would be if one instituted an international gold standard.
4. Contracts between private individuals will continue to be denominated into what ever domestic currency permitted by local laws and agreed upon by the contracting parties.
5. An overdraft system to make available short-term unused creditor balances at the Clearing House to finance the productive international transactions of others who need short-term credit. The terms will be determined by the pro bono clearing managers.
6. A trigger mechanism to encourage a creditor nation to spend what is deemed (in advance) by agreement of the international community to be "excessive" credit balances accumulated by running current account surpluses. These excessive credits can be spent in three ways: (1) on the products of any other member of the clearing union, (2) on new direct foreign investment projects, and/or (3) to provide unilateral transfers (foreign aid) to deficit members.
7. A system to stabilize the long-term purchasing power of the IMCU (in terms of each member nation's domestically produced market basket of goods) can be developed. This requires a system of fixed exchange rates between the local currency and the IMCU that changes only to reflect permanent increases in efficiency wages.(22) This assures each central bank that its holdings of IMCUs as the nation's foreign reserves will never lose purchasing power in terms of foreign produced goods, even if a foreign government permits wage-price inflation to occur within its borders.
8. If a country is at full employment and still has a tendency towards persistent international deficits on its current account, then this is prima facie evidence that it does not possess the productive capacity to maintain its current standard of living. If the deficit nation is a poor one, then surely there is a case for the richer nations who are in surplus to transfer some of their excess credit balances to support the poor nation.(23) If it is a relatively rich country, then the deficit nation must alter its standard of living by reducing the relative terms of trade with major trading partners. If the payment deficit persists despite a continuous positive balance of trade in goods and services, then there is evidence that the deficit nation might be carrying too heavy an international debt service obligation. The pro bono officials of the clearing union should bring the debtor and creditors into negotiations to reduce annual debt service payments by [1] lengthening the payments period, [2] reducing the interest charges, and/or [3] debt forgiveness.(24)”
So, you see, transcendent ideas of social, economic and political conditions are nothing new. It’s just the wise sages of the world have never been listened too. Don’t you think it’s about time? Now, can you see why my statement, “Governments should use money, to reduce prices, and increase wages and profits”, is thoroughly true? The clearest representation of this new transcendent possibility of responsibility is best represented by the words of all these great sages of transcendent ideals, by realizing they all offered, at differing times in history, a chance for all citizens of planet earth, a way out of the great conflagrations of tribal arguments, through realizing money, and money itself, as an autonomous tool of governments, can be used far beyond its present irrational status. Money can function as a fundamental transcendent ideal of social, market, trade and political actions, when organized through thorough exchange clearing mechanisms, having the ability to reduce global debt structures, i.e., self-liquidating national debts, as per Keynes Bancor System, or Paul Davidson’s ICB(international clearing bank), among all the others. These exchange clearing mechanisms can be instituted either externally or internally, according to the needs of each individual nation, but responsibly instituted, they must be, to reduce prices, and increase wages and profits, responsibly and successfully, while reducing overall global costs, achieving full and true subsidiarity and sustainability, and not their false ideological counterparts... Also, to top it off, here’s a few of my own proposals of external and internal exchange clearing:
“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. 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. 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 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 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 financing, but the rebalancing will recreate so much new credit productivity, it will pay itself back over time 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.”
I didn’t mean to make this post so long, but the dynamics involved in understanding how theoretical transcendental ideals of, “Governments should use money, to reduce prices, and increase wages and profits”, is very difficult for the un-initiated to wrap their heads around, as it sounds paradoxical, when in fact, it is not. If all try to figure the dynamics involved, in the above ideals, we can truly solve all the world’s problems, and successfully institute a new “Imperative of Responsibility”___A Higher Road…
All we have do is ask, “Have we acted responsibly?” My answer is, “Absolutely not!” From Nixon, through Reagan, Bush I, Clinton and Bush II, we’ve seen and been nothing but irresponsible, to our fundamental ideals, of sound government and finance. How could we have lost our way so badly? My answer is, we spent so much time fighting and warding off Marxism, socialism and communism, our simple fears of, we actually forgot to build further on our fundamental ideals, and instead, adopted financial evolution by accident, and hap-hazard in-attention. Both political parties allowed the policies and philosophies of the moment, to control our destinies down roads any sane nation, would have never traveled, with irrational de-regulations of other-wise sound markets and trade, to massive profligate increases of finally un-repayable debts. So, now we arrive at the grid-locked arguments of two special interest groups, with their un-resolvable differences.
Whether we look at this enigma from the perspective of social responsibility, or economic survival, we must develop a new and transcended philosophy of government, economics and politics, capable of bridging these diverse differences. When I mention “A transcendent theory of responsible semi-philanthropic government”, it no longer looks utopian, as it once did, as it’s actually the forms of governments, many nations of the OECD capitalist world, have now adopted, so it allows us to discuss such a topic, with a new sense of responsibility, as opposed to our present profligate irresponsibility. Now, what would such a transcendent vision look like? I’ll state it bluntly first and explain later, “Governments should use money, to reduce prices, and increase wages and profits”. Now, at this moment, all educated people would yell and scream, “This is impossible”, yet I say, “No, it is not.”, and I have more than one proof of its full possibility. Let me here enter just one of the transcended ideas of responsibility, first offered by Plato, some 2400 years ago:
“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”.
Also, if you go back to one of my earlier posts at: http://theawakeningoftheamericamind.blogspot.com/2008/07/essay-on-paper-currencyproposing-new.html where you will see a similar transcendent idea put forward by our very own Benjamin Franklin. And here again is the same transcendent idea of Paul Einzig and J.M. Keynes, put forward by Paul Davidson:
“Elsewhere(Davidson) I have developed in detail a proposal for reforming the entire international payments system via an international clearing union that provides for capital controls and other necessary and sufficient conditions to permit the establishment of a golden age in the 21st century. The main proviso of my proposal are:
1. The unit of account and ultimate reserve asset for international liquidity is the International Money Clearing Unit (IMCU). All IMCU's are held only by central banks, not by the public.
2. Each nation's central bank is committed to guarantee one way convertibility from IMCU deposits at the clearing union to its domestic money. Each central bank will set its own rules regarding making available foreign monies (through IMCU clearing transactions) to its own bankers and private sector residents(21). Ultimately, all major private international transactions clear between central banks' accounts in the books of the international clearing institution.
3. The exchange rate between the domestic currency and the IMCU is set initially by each nation -- just as it would be if one instituted an international gold standard.
4. Contracts between private individuals will continue to be denominated into what ever domestic currency permitted by local laws and agreed upon by the contracting parties.
5. An overdraft system to make available short-term unused creditor balances at the Clearing House to finance the productive international transactions of others who need short-term credit. The terms will be determined by the pro bono clearing managers.
6. A trigger mechanism to encourage a creditor nation to spend what is deemed (in advance) by agreement of the international community to be "excessive" credit balances accumulated by running current account surpluses. These excessive credits can be spent in three ways: (1) on the products of any other member of the clearing union, (2) on new direct foreign investment projects, and/or (3) to provide unilateral transfers (foreign aid) to deficit members.
7. A system to stabilize the long-term purchasing power of the IMCU (in terms of each member nation's domestically produced market basket of goods) can be developed. This requires a system of fixed exchange rates between the local currency and the IMCU that changes only to reflect permanent increases in efficiency wages.(22) This assures each central bank that its holdings of IMCUs as the nation's foreign reserves will never lose purchasing power in terms of foreign produced goods, even if a foreign government permits wage-price inflation to occur within its borders.
8. If a country is at full employment and still has a tendency towards persistent international deficits on its current account, then this is prima facie evidence that it does not possess the productive capacity to maintain its current standard of living. If the deficit nation is a poor one, then surely there is a case for the richer nations who are in surplus to transfer some of their excess credit balances to support the poor nation.(23) If it is a relatively rich country, then the deficit nation must alter its standard of living by reducing the relative terms of trade with major trading partners. If the payment deficit persists despite a continuous positive balance of trade in goods and services, then there is evidence that the deficit nation might be carrying too heavy an international debt service obligation. The pro bono officials of the clearing union should bring the debtor and creditors into negotiations to reduce annual debt service payments by [1] lengthening the payments period, [2] reducing the interest charges, and/or [3] debt forgiveness.(24)”
So, you see, transcendent ideas of social, economic and political conditions are nothing new. It’s just the wise sages of the world have never been listened too. Don’t you think it’s about time? Now, can you see why my statement, “Governments should use money, to reduce prices, and increase wages and profits”, is thoroughly true? The clearest representation of this new transcendent possibility of responsibility is best represented by the words of all these great sages of transcendent ideals, by realizing they all offered, at differing times in history, a chance for all citizens of planet earth, a way out of the great conflagrations of tribal arguments, through realizing money, and money itself, as an autonomous tool of governments, can be used far beyond its present irrational status. Money can function as a fundamental transcendent ideal of social, market, trade and political actions, when organized through thorough exchange clearing mechanisms, having the ability to reduce global debt structures, i.e., self-liquidating national debts, as per Keynes Bancor System, or Paul Davidson’s ICB(international clearing bank), among all the others. These exchange clearing mechanisms can be instituted either externally or internally, according to the needs of each individual nation, but responsibly instituted, they must be, to reduce prices, and increase wages and profits, responsibly and successfully, while reducing overall global costs, achieving full and true subsidiarity and sustainability, and not their false ideological counterparts... Also, to top it off, here’s a few of my own proposals of external and internal exchange clearing:
“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. 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. 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 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 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 financing, but the rebalancing will recreate so much new credit productivity, it will pay itself back over time 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.”
I didn’t mean to make this post so long, but the dynamics involved in understanding how theoretical transcendental ideals of, “Governments should use money, to reduce prices, and increase wages and profits”, is very difficult for the un-initiated to wrap their heads around, as it sounds paradoxical, when in fact, it is not. If all try to figure the dynamics involved, in the above ideals, we can truly solve all the world’s problems, and successfully institute a new “Imperative of Responsibility”___A Higher Road…
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