It’s worth stepping back on occasion to consider the progress that has been witnessed in particular academic fields. Astronomy took a giant step forward centuries ago when it finally realized the sun was at the center of the solar system. Geology adapted to the fact of a round earth. The continuous evolution of Physics boggles the mind. Engineering perpetually pushes into new frontiers.
And how does Economics compare?
Well let me take a moment to congratulate the few Harvard, LSE, Princeton, Chicago, MIT grads serving Wall Street, the Fed primary dealer cartel, the IMF, and the World Bank (and Larry Summers deserves extra credit). These economists drive the field, and they’ve brought it to a point that has taken us back to the days of medieval feudalism. The field is now more primitive than flat-earth Geology and Ptolemaic Astronomy. Congratulations economists!
Of course it’s not entirely the economists’ fault. They were taught from day one in Economics 101 that they will undergo a moral lobotomy. Neoclassical Economics goes to great lengths to indoctrinate new recruits that it’s a positive vs. normative “science.” Other sciences don’t bother to do that because the fact is there should be no conflict between the positive and the normative. Why is Economics the only field that does this? Because it wants to avoid the questions that good students interested in true progress would otherwise ask. It knows it’s hiding something in its content that conflicts with the normative and it doesn’t want students to search for and find the truth. Just remember this helpful indicator in your next life–anything that goes to such lengths to admit upfront that it’s morally bankrupt might be something around which you should NOT build your life!
The truth is that modern Economics has been designed to completely hide the monetary system that hovers above the economy. It assumes money is just a medium of exchange floating through the economy to facilitate a free market and generate wealth. At times that has been true, but today it’s probably the biggest lie of modern history. The current system does not generate wealth and freedom for most people. It generates debt and servitude. And it is not a free market. Today’s money flows from a top-down imperial power system expanding globally. It creates a master-servant relationship because all money comes from privately held debt.
Let me say that again. ALL MONEY COMES FROM DEBT (for those of us who suffered the most indoctrination by attending schools like Harvard, let’s pause here for a moment so we can catch up to the rest of the class). This means in order for governments, businesses, and people to have the liquidity necessary to live, they must agree to sign over a claim on their assets to banks. As the banking system inflates over time passing out credit, which makes everyone feel good with more digits in their accounts, it gathers claims on all the assets in the system for its private capital holders. Admittedly, this is one way of facilitating development (good students would’ve figured out a better way had they not been stifled). But it’s also the method for transferring everyone else’s assets to the balance sheets of the capital holders behind the banks once deflation sets in.
This is what we’re facing today. The global banking system has a claim on most assets in the world (except those in places like Iran, so it’s no surprise the military is gearing up to conquer the region for Wall Street and its Harvard employees…like JP Morgan Chase moving in on the mineral assets seized in Afghanistan because it’s a primary bank that pays the military-industrial complex to conquer territory for it).
Once the system has gathered all the claims it wants, senior capital will be removed, kicking off the next phase of deflation and a transfer of assets from the people to the banks. At that point we’ll probably see JPM Chase CEO Jamie Dimon, another Harvard lobotomy victim (there’s a high correlation between Ivy League lobotomies and billionaires), on CNBC threatening Americans to pay up as his firm jacks up their rates and takes their homes like he did in early 2009.
In this transfer process, the people’s equity will be eliminated. And this means, they will be returned to the life of a feudal servant to the capital holders behind the banks. This is not rhetoric, but the unarguable math and accounting of the banking system. It’s very simply a mechanism to transfer assets/equity from the balance sheets of the many to the balance sheets of the few.
So a final word for all the top economists out there:
Congrats again! It didn’t take much to buy you off. Today’s financial elite who control the global debt machine have rewarded you with paychecks and the status of the high priests of old. Sad. Do you have any pride, or is it really that easy to co-opt you with retreats in Jackson Hole, hobnobbing in Davos, and membership in the CFR?
Come on. Rise above it. You are obligated to fix this immediately:
1) Develop an interim solution in concert with the old time-tested bondage/jubilee, growth/rest cycles which gave the people, communities, land a breath of fresh air in the midst of empire growth. (if you’re writing that off as religious romanticism, ask yourself what top athlete doesn’t live by training/rest cycles…over-training results in deterioration, not progress)
2) Then develop and advocate a humane money system that facilitates the rebuilding of real community as opposed to one based on debt servitude that parasitically sucks the life OUT of communities.
We know the debt holders have a lock on Harvard and LSE (my days at Harvard were marked by professors preaching the greatness of Enron finance and Wall Street derivatives, so most Harvard grads are probably beyond recovery). But what about the rest of you? It’s time to step up and work toward progress like your colleagues in other fields. It’s time to move beyond the dark ages.
A little critical analysis…
Over on my home blog, I pointed out to people over a year ago that the current tendancy to disqualify economic “science” by lodging it firmly in the camp of “religion” actually manages to STILL salvage the BELIEF (belief has a religious structure and purpose…religious in a larger sense than organized, institutionalized individual religions, of course) IN “science”, and that the application of the scientific method to all areas/objects of interest will save us.
Not true in my book.
There is another leitmotif that emerges constantly in the blogs, and that is the “return to feudalism”. Unfortunately, most people who constantly talk about the reversal of “progress” and the return to feudalism really know very little about feudalism, because they have not cracked their history books. (yes, well, a Harvard education in economics probably does not get one cracking those history books as much as could be wished…)
Who do you think that the owners of the world’s wealth are, right now ?
Are they individuals ? Are they a caste ? Are the banks individuals ? When we say “the rich”, are we talking about flesh and blood people, or are we talking about banking INSTITUTIONS ? I can’t figure this out. But I DO know that there is a difference between a flesh and blood person, and an institution.
I also think that increasing abstraction (re the above questions…) is part of our problem. At least the SERF knew what his lord looked like. He knew too, that if HE didn’t work, well then, he AND his lord didn’t eat. He knew that he had the right to congregate in his lord’s castle for protection under risk of attack. And he did it, too.
The lord knew that he was under obligation to protect the people who cared for the land in exchange for what he received from them.
All in all.. it was an extremely sophisticated, balanced, highly thought out system that… had its good and bad points (just like OUR system does…) No cars, though.
Perhaps, under capitalism, WE are not so fortunate in some ways (outside of those cars, and everything that goes with them…) ?
Lots and lots could be said about the “ancien régime”.
First and foremost.. that it was NOT what… succeeding propaganda (every ideology lays the base for its own takeover through discrediting the preceding ideology) has led us to think it was..
valid points. you’re correct that the feudal lords at least had honor and a sense of responsibility for their communities. so did the mafia. unfortunately the current overlords have none.
but my goal was to specifically point out the hypocrisy of the economics profession–those who claim to be building a grand world of freedom when the mathematics of the system are quite the opposite.
the banks are simply the laundering machine for the senior capital pools around the world to keep the masses in the spin cycle. and the people behind the senior capital pools are the most powerful people in the world–royals, the banking establishment, and I’d suggest the oil/resource corporate establishment and military-industrial complex both of which work for the banking establishment.
The problem with all schools of economic thought, even the Minsky-inspired Post-Keynesians, is that they either ignore the debt-money system, or they try to work around it without truly addressing the root problem. The Chicago School, a neoliberal school bought and paid for by the financial interests, and the dominant school in the U.S., is the primary and direct cause of the bubbles and bailouts we’ve had since the Washington Consensus was reached. The Austrian School, another neoliberal school bought and paid for by the financial interests, and the most prominent heterodox school, is waiting to step in and lock down the gains of the ponzi schemes for the financial interests once the system collapses.
Sorry Damon but I think it is an error to agree with this woman’s reactionary and in my view incoherent comments in favor of feudalism and aristocracy. Feudalism was/is a slavery system and while some of the slave owners may have looked after their property with some degree of care many did not. At any rate human slavery is a dishonorable system.
Your point about the indoctrination of economics students into the worship of the golden calves of Mammon and the Market is spot on.
Damon,
that oldest and most institutionalised money pool in human history is the catholic church. It is both a country, a central bank, a corporation and a global investor of little discernible morality and immense financial and political power.
Dont misunderstand; I am a Christian and I have no objections to catholic believers nor any wish to offend them. But the church styled itself as the “Holy Roman Empire” – i.e. as a political institution – and it continues to behave in this vein.
It has also implicated itself in a number of the historic processes you describe – the rise of fascism, the destruction of disobedient nations, and etc.
If the shoe fits?
Regards
SM
What an appalling comment. But you are free to express your reactionary support for slavery in the form of feudal aristocracy. I presume you consider yourself of the class of the benevolent slave owners. You would hardly wish to be a feudal serf either in a medieval or a modern context.
Either you are born into an elite family or you have been successfully lobotomised by your education.
@ Debra; the owners; http://www.forbes.com/2010/03/10/worlds-richest-people-slim-gates-buffett-billionaires-2010_land.html
“All in all.. it was an extremely sophisticated, balanced, highly thought out system,.”
Really? Seems down right medieval to me. How about a system of free people living in comunities, that interact through volentary cooperation, with a fair and reletively equal distribution of resources, striving for the common good, that I could get behind. It has to start with the ending of the current monitary system and the birth of a new form of exchange that is not based on debt and the upward acceleration of weath from the many to the few.
We’ve reached a level at which a sound and moral banking system is likely illegal. People will reject the existing system out of consequential poverty. Then the cartel will collapse; the laws of nature prevail. If there is a better/quicker way out, like an epiphany of conscience, that would be preferable.
“Lots and lots could be said about the “ancien régime”.
First and foremost.. that it was NOT what… succeeding propaganda (every ideology lays the base for its own takeover through discrediting the preceding ideology) has led us to think it was..”
How ancient are you talking about? You are correct in any case. History lesson ARE biased and slanted. We need to stop teaching history through the lenses of outdated traditions. We need to understand why those old belief systems were developed, how they were used, and how they’ve been manipulated to continue applying in today’s world.
Facts are just facts. That’s what we need more of in historical education. We need unbiased, neutral, chronological facts to get to the root of how it’s gotten worse and how people are kept in the darkness. (Repression is the modern mode of distraction)
Beliefs are just accepted thoughts. When beliefs are used and played on selfishly, they get in the way of individuals being open to neutrally re-contextualizing,understanding, interpreting any existing condition: physical, or any effected mental, emotional, or spiritual state of being.
“How about a system of free people living in comunities, that interact through volentary cooperation, with a fair and reletively equal distribution of resources, striving for the common good, that I could get behind. It has to start with the ending of the current monitary system and the birth of a new form of exchange that is not based on debt and the upward acceleration of weath from the many to the few.”
Here, Here! I second that!
Um, jph… the IDEAL sounds really good, BUT..
WHO is going to decide what the “common” good is ?…
I think that basically.. EVERY political system gets glitched on this one.
i think that what WE call “democracy”, through 19th century Romantic rose colored glasses harking back to classical Greece is getting a little tired these days. In our OWN eyes, even.
When you start remembering that every advantage has its disadvantage, and pick up Tocqueville who was enough of a prophet to foresee where we are now, well, we are about overdue for a return to INCARNATED authority as opposed to.. abstract ideals.
“We” do a lot of flip flopping, going from one extreme to the next over long AND short periods of time, as it turns out.
Last year’s dresses are already out of style.
Last century’s politics are going out, too…
As far as “facts” are concerned, I don’t really know what to say either, except that “facts” always need to be interpreted, and another big glitch comes in here too.
Because… every age interprets its “facts” differently.
That kind of puts ME off the idea of “facts” altogether…
Lest I sound TOO nihilist, let me assure you that I am NOT nihilist at all.
But what I believe in.. that’s complicated. Too complicated for here, right now..
I live abroad.
Three years ago when I came back to the mother country for a visit, I saw every indication that the majority of U.S. citizens were not interested in freedom at all anymore. They were/are interested in… security. FINANCIAL security… physical security… you get the picture.
Some founding father said something along the lines of… you can’t be FREE AND safe.. What you obtain in one direction is obtained at the expense of something.. in the other direction. A real, authentic EXCLUSION there. Probably true, I think…
Not good for the “democratic” experiment, in any case. Ripe for… the authoritarian one, I fear.
The pendulum has swung back.
Using our vast resources here at the Falberg Institute of Applied Statistics it has been determined that every American holds a unique interpretation of the term: “Common Good”.
Discretely polling each of them, our dedicated servers, using the latest experimental and highly proprietary algorithms have, after years of non-stop number crunching, finally classified and collated their responses. Of the total 309,889,000 Americans sampled: 159, 800,000 responses were rejected for illegibility; 29,089,000 were rejected for being in Spanish: 41,000,000 were rejected for being incoherent; 29,000,000 were rejected for being absurdly radical, and a whopping 50,000,000 were rejected for obscenity; leaving only 1,000,000 usable, coherent, English, civil, politically realistic, and decipherable data entries to consider. Of the remaining million, only 1/1000th of one percent equated the Common Good with lower corporate taxes (and those were subsequently rejected for being fraudulent, computer-generated responses). Of the remaining valid responses: 999,990 were found to be self-serving statements, variably worded, but essentially; “the Common Good is that which promotes my personal well-being”.
Marvellous, simply marvellous. The Falberg Institute.
Debrah, i dont really have time enough to get into every aspect of how a communal system might work but put aside all the illusion propaganda has put in our heads the only relavent question is: do we have enough recorces to go around to our in our world. the answer is yes.
Criminal networks and fraud have become institutionalized in America aided by an irresponsible media monopoly and treasonous public servants on the take. Crime is openly rewarded with wealth and power as long as you serve the international banking dons.
Harvard Mafia, Andrei Shleifer and the Economic Rape of Russia
In a rare MSM article, the Huffington Post asked the obvious Larry Summers, Robert Rubin: Will The Harvard Shadow Elite Bankrupt The University And The Country?
Perhaps their worst crimes have been committed against their students who are indoctrinated rather than taught. In the middle of the 19th century, Mayer Amschel Bauer Rothschild prophetically said “The few who understand the system, will either be so interested from it’s profits or so dependent on it’s favors, that there will be no opposition from that class.”
If by “jubilee” you mean forgiving debt, I’m not sure that is an equitable solution as many private individuals would bear the cost through their investments, pensions, 401-ks, etc.
As a sovereign nation, the U.S. may directly issue money without incurring debt. For example, we owe the privately owned and operated Federal Reserve around $6.5 trillion. This could be paid with a click of a mouse, and the money would be instantly extinguished in satisfying principal debt.
It would not be quite as easy with the rest of the national debt as it is owned by private individuals and foreign nations – but it is doable.
Larry
I agree universal debt forgiveness would wipe out the economy…we’d have no money. I’m trying to get economists to think in the “spirit” of jubilee by which I mean solutions focused on benefiting the people vs. the banking power system (as Michael Hudson suggests). I don’t know what the best solution would be.
The first step to a solution is to start creating debt free money. It can be done either at a state or at the federal level. I suggest you start where you think it can be done the quickest. Once we have money without debt we can start working on the best way to get rid of the debt.
“WHO is going to decide what the “common” good is ?…”
Check out the Common Good Bank Project! It has a highly refined and sophisticated democratic system that can easily find workable solutions for common good wealth distribution.
The fact that somebody can design a system that looks different old school feudalism but has the same effect does not mean it is something other than feudalism.
Neoliberalism is feudalism wrapped in the clothing of classical liberalism. The lords are multinational banks and corporations. The serfs are “consumers” (we’re not citizens any more) who must accept what the lord god market (praise be his name) provides them with scrip from the company store (the Federal Reserve). The difference this time is that the feudal lords have no social responsibility other than to maximize profits for their shareholders, who will number fewer and fewer as they, too, get consumed by the system. You can’t grow profits or debts exponentially forever, and as fewer and fewer of us are in the pool of “coppertops” powering the debt matrix, those of us who are more affluent and think we’re part of the plutocracy will be placed in our pods. The key is to stay away from taking on debt (and pay it off, if you have any).
I agree Tao…neoliberalism is hidden slavery. of course Chomsky says that classic liberals (Jefferson, Adam Smith, etc) thought way back then that any wage employment was slavery. my how things change!
regarding paying down debt, the problem a lot of people have now is they can’t sell their homes even if they want to pay down debt.
This isn’t new, either. Look into the Serene Republic of Venice which ruled in its time using debt-slavery and currency manipulation. Hmm…I wonder why THAT wasn’t in my high school history textbook, either?
It’s not slavery if it’s voluntary! An employee has to agree to work for a wage and can choose to quit.
Chomsky? Is MIT not to be scrutinized the same as Harvard? Libertarian socialism is an oxymoron.
Jefferson did recognize the tyranny of the majority that can form under democratic government. Think of the Salem witch trials.
We are all being lied to about what a “free market” really is. The idea of a free market does not support the Federal Reserve.
Why is the choice to not participate in markets ignored? One can achieve self sufficiency and exit the market. One can even go one to support others this way too.
Who does the system benefit? Who(m) set it up? The unwillingness to discuss the ethnic war that is our financial system renders impossible any improvements.
We are entering a debt deflationary spiral. The way out according to Steve Keen is to wipe out the insolvent institutions and sell off their assets and increase wages of the workers which would increase inflation and get us out of the debt spiral. But it will be the last thing government will do because economists always want to reduce labor costs. Yes, the current system is going to produce sharecroppers or wage slaves if it goes on. Obviously, neoclassical economics is a failed discipline, but like an outdated religion, its believers’ faith is strong. At least the Brahman priests figured out how to neutralize Buddhism in India, leading to Buddhism’s decline as the majority religion in that nation. In that sense, Hinduism evolved. But we see nothing like that in economics and economics is definitely more religion than science. If it were a science, economists would be scrapping their assumptions and models of how the world works, but nothing of the sort is occurring.
What is really missing from this conversation is dirigism – the doctrine of List of Germany, Carey of the United States and others worldwide, including modern Korean economist Hun Joo Park.
In spite of its burial by the countless who tout either ultra-freetradism or Keynsian central bank controllism, there has always been another option, one which has been used repeatedly to make nations prosperous across the globe. Of course, it involves the issuance of sovereign credit to grow infrastructure, energy and transportation (things that support the growth of local enterprise and a high standard of living, which leads to greater creativity) in conjunction with well-negotiated fair trade policies – policies which allow nations to trade respectfully with one another (instead of calling it “normal” when some nations loot other nations).
This type of economic system, where people involved in government and economics remember that prosperity is all about goods and services – rather than money – and where nations may develop their own resources and then trade with one another – is the system that many nations attempted to encourage under the founding of the fixed-exchange rate system at Bretton Woods – and eliminated in 1971. Was this system Keynsian? He tried to say so, after FDR died. But then he went and subtracted the issuance of national credit part, and put in the private central bank part – essentially putting power right back into the hands of the same people who looted world-wide under freetradism.
I’d like to back back to a very important question Debra asked and still remains unanswered: who takes ownership of the People’s assets once the banks foreclose? The stockholders obviously; but if the stockholders are retirement accounts wrapped up in hedge funds is there any way to name names where “The Rich” become Dark Overlords of the Universe and decide how the Global Economy will control our destiny?
See? It’s too complex for most business people to wrap their minds around.
One thing that consistently stands out in my mind is that the major institutions involved are confusingly labeled as The Rich; yet institutions are merely TOOLS of the Rich. They’re not capable of enjoying their Richness; only their Managing Directors are capable of REALizing that richness and exerting control over the consequences of the power derived therefrom. It gets truly insane, yes?
I believe the Insanity creeps in with the confusion over “personhood” and how we treat “entities-of-multiple-ownership” under corporate law. I think we have to DEFINE the function of corporate entities through the legal framework of a template for Corporate Charters, universally. It won’t be an easy thing to set down on paper but it must be done to restore SANITY in Capitalism and put multiple-ownership business entities into a context that renders them useful to the People like any other tool serves specific functions.
Corporate Charters, thus written to SERVE the Capitalist Economy would then make perfectly good sense; that is, they generate Capital for large projects and spread risk among multitudes of investors.
As “business entities defined by Government Charter” they would be exempted from the Constitutional Rights enjoyed by “real persons”; ie, voters, and subjected to a different set of laws than the Managers that direct them. The Managers would then be held to account by Government under the Constitution.
Get it? A separate CLASS of business entity, separate and apart from entrepreneurs and business PERSONS.
Maybe then we could back to where “is” means “is”. Ah; sanity, at last.
The controllers behind BoA, Citi, JPM will administer the assets.
The managing directors aren’t the top. Corporations were created by royal families, as were modern governments. The MDs are wage servants for them.
Who are the controllers? The elite families at the top learned in the Teddy Roosevelt days to shift from ownership to control….they want to exert control over balance sheets rather than own them directly (risky, exposed, etc). Standard Oil shifted from a monopoly run by 1 dude to a collection of corporate logos (today mainly Exxon Mobil Chevron Amoco which is now merged with British elites behind BP). But the Rockefeller family still exerts a level of control over these assets (along with Chase, Citi, GS, BoA). The common stockholders are irrelevant. In fact, securitization was designed to eliminate competitive private controllers…basically nobody owns public companies since “everyone” does now that Wall St inflation forced all companies to go public or be bought out.
They exert control in ways similar to old monarchs, mafia families, and even politburos: 1) they allow a noble class to rise up surrounding them (you want narcissists on your side rather than fighting you). 2) they ensure some intrigue/secrecy in how they operate to keep people in line. 3) they establish institutions like the CFR to build leverage and create extreme groupthink pressure (again, attract the narcissists and keep them on your plantation). The Central Organization Department is the politburo of China and it’s almost a replica of the CFR. See FT article…http://www.ft.com/cms/s/0/ae18c830-adf8-11de-87e7-00144feabdc0,dwp_uuid=9c33700c-4c86-11da-89df-0000779e2340.html
At this point, Wall Street control of publicly-traded companies is built into the methods for valuing companies used by stock analysts, which were developed largely by the Chicago School. Most of the practices that were made illegal as a result of the Pecora Commission Report have been replicated in effect but without an apparent direct line of control.
There’s also a natural desire to want to have a large proportion of your shares held by institutional holders because it greatly reduces the volatility of your share price, particularly if you are lightly traded. Usually, all the institutional guys know each other, and on any particular company, the group will take its cues from one or two guys (like Goldman Sachs and JPM). The only guys who really act independently from the pack are the retails like Fidelity and Vanguard, probably because they’re beholden to small investors. The fact that a lot of these institional investors don’t actually own your shares but hold them for others doesn’t change the fact you pay attention to what they have to say and their concerns. When Goldman Sachs calls, you make yourself available.
Damon,
Your point about control is key. Ownership is just a legal concept that exposes one to liability, taxation and public scrutiny. The goal is to control. Those who control are perfectly happy for others to invest in ownership in their enterprises as long as they can control the capital. It’s called OPM (other peoples money).
I was amused to once again see the published list of the world’s ‘richest men’ this week. Of course there were the usual suspects such as Gates and Buffet who ‘own’ great wealth. Those who never show up on these lists are the ones who ‘control’ vast fortunes that dwarf the likes of Gates, Buffet, Ellison, et al.
Back at the beginning of the twentieth century men like John D. Rockefeller, the world’s first billionaire back when a billion was a billion, traded ownership of their vast fortunes for the control of tax-free ‘charitable’ foundations where their wealth is compounded tax-free with zero public scrutiny. These foundations control, through layers of legal entities and holding companies, vast holdings in banking, industry, and media and, of course, endow the elite universities where their underlings are recruited and educated. The assets of these foundations are 100% controlled by the family.
It is estimated that Rockefeller controlled interests amount to many trillions of dollars in value. Just plug in an average appreciation of only 10% on a billion dollars over the last 100 years and see what you come up with. Even the estates they live on are owned by their foundations sans taxation. Back when Nelson Rockefeller ran for president it was revealed that he paid zero taxes.
Ownership is for suckers.
It’s so sad that the Austrian School of Economics described by Mises, Hayek, and others was drowned out by Keynes in the early and middle 20th century. Economics as a science is more like psychology than physics, geology, or engineering. You can measure it, but the equations and formulas are only ideals. It is a study of human behavior. “Human Action” by Mises is a rational investigation of human decision making. Humans created the concept of money out of necessity. It used to be a real commodity, like gold. Now it is fiat, with no intrinsic value or limit of supply.
1) The Austrian School explains the business cycle and allows for people to grow and rest. It does point out how the cycle is disturbed, magnified, and made worse when the central bank or government interferes. For example, artificially low interest rates promote risky use of easy money and more debt. When debt is bigger than savings, the natural thing to do is increase interest rates to promote savings and discourage indebtedness.
2) The Austrian School advocates voluntary exchange. With a free market, people must cooperate with others to achieve there economic desires.
Kyle,
The Austrian School is not what it purports to be. Hayek, Mises and Rothbard were all founders of neoliberalism, which they constructed with one truth for the masses, and one truth for the elite. The truth for the masses is that neoliberalism (and the Austrian School) support natural law principles of individual liberty and freedom as advocated by Thomas Jefferson. The truth for the elite is that the “individual” is the corporation and the state is powerful and central as advocated by Alexander Hamilton.
The Austrian’s so-called “free” banking fully backed by a gold standard would be a disaster for the masses (who would be forced to accept usurous interest rates due to scarcity of capital) and leave the elites free to practice fractional reserve banking for the purposes of financial speculation. Booms and busts are NOT inevitable, and they’re not caused by “malinvestment” they’re caused by highly-leveraged debt-financed financial speculation (the gold standard and 100% reserve requirements are merely regulations that can and will be avoided by financial innovators). Criminalize financial speculation using fractional reserve banking (or evquivalent) and deny limited corporate liability for being a party to it, and you’re done. There’s no need to apply such draconian measures to investments that increase the productive output of the economy.
You might be interested in the Bloomberg LP vs Federal Reserve case headed for the Supreme Court:
http://www.bloomberg.com/news/2010-08-25/fed-seeks-stay-of-ruling-requiring-release-of-u-s-bank-bailout-documents.html
PS I don’t think we necessarily have to criminalize speculation. If we held the OWNERS of the entities these speculators represent FINANCIALLY responsible for their losses, the OWNERS would be far more demanding of their Management. If I was an owner under those circumstances I wouldn’t be paying a manager $1 million/year unless that manager was very, very crafty. There would certainly be a downside to loss and failure. We might even see self-regulation set in as a way-of-life for financial institutions. What a concept, eh?
@William,
Financial speculation is unavoidable, and I’m not against it. If you buy stocks or bonds on the secondary markets, you engage in financial speculation (calling it investing is an innocent fraud).
My concern are things like hedge funds, who borrow 5-10x (or more?) of the money they receive from particpants to speculate with (e.g., participants in the fund provide $100 million, the hedge fund borrows $900 million on that and “invests” a total of $1 billion in the markets).
I have on problems with hedge funds doing this if the $900 million is 100% backed by reserves, i.e., by real, already existing money such that no new money is created in the transaction.
Free banking would allow competing currencies backed by whatever any new bank wants to back it on. It can be gold, silver, services, other commodities, or even fiat like we have now. True free banking would not force any standard on anyone. The Austrian School is one of the few that is AGAINST the Federal Reserve. At minimum they can be an ally for this cause.
I support what they purport, not what it may or may not be. I would do more study on what message is coming from the Ludwig von Mises Institute (mises.org). They do not support corporate run government. They do not support a central bank. The actual work produced by Austrian scholars does not support the ideas of Hamilton. The ideas of the Austrian School were hijacked by Hamiltonian thinkers. For example, Reagan violated neoliberal fiscal policy by running a large deficit. Privatization has taken on a whole new meaning; to some, a government funded contract is falsely considered privatization.
Defect or not, high levels of government spending and intervention as well as a powerful central state are not supported by the Austrian School.
I’m supporting the Jeffersonian ideas, regardless of where they come from. Jefferson was not perfect, he owned slaves, but his ideas are what’s important. The principles of individual liberty were on the side of ending slavery. I won’t fall for the guilty by association fallacy. Too much thinking on association blocks out thinking on the actual ideas themselves. People do things under certain banners, but their actions misrepresent and conflict with the ideas of the banner.
@Kyle,
The first clue that you’re being sold the opposite of what you’re going to get ought to be the tag “free” in front of banking. Neoliberalism is just a new form of feudalism and is sometimes otherwise known as “libertarianism.” If you think you’ve learned anything about liberty from people like Hayek, Mises and Rothbard, you are sorely mistaken.
A central aspect of neoliberalism– especially as exemplified by the writings of Hayek and Mises– is the double truth doctrine: there’s one truth for the masses, and one truth for the elite. The truth for the masses is Jeffersonian concepts of Enlightened liberty. The truth for the elite is actually worse than Hamilton, it’s nothing less than a return to feudalism with the masses as the serfs, a repudiation of the Enlightenment.
When I first started reading Mises and Hayek, I was stunned by some of the naive things they said. At the time, I was an executive in a public company, and Mises is telling me that bureaucracy can NEVER occur in private enterprise, which was so amazingly counterfactual that I initially thought it to be one of the dumbest things I’d ever heard. Than I thought he was just naive or ignorant. I ultimately arrived at the conclusion that he was a liar, that all the drivel he wrote was propaganda provided as pablum to the ignorant masses.
Let’s turn briefly to Hayek. If your government owns your country’s means of production, Hayek would call that socialism, which is the Road to Serfdom. What do you call it when another government owns your country’s means of production? “Free” trade! Get it? It’s okay for communist China to own America’s means of production. No serfdom to see here, but heaven forbid that America owns its own means of production.
I will admit that Hayek and Mises were geniuses. Evil geniuses.
Tao, you’re correct. The key insight is to ponder the definition of freedom from the perspective of the strong vs. the perspective of the masses. And by “strong” I’m not talking about the people who think they’re “successful” or “independently wealthy” or “rugged individualists.” They can only think those things of themselves by being blind to the system within which they are operating that allowed them to collect bank credit. They have no clue how small they are compared to the real “strong” I’m talking about.
Basically Austrian theory and libertarianism taken to their extreme justify monarchy, which is just the ultimate end result of survival of the fittest where the strongest dude won everything and imposed his own rules. That’s freedom for him…enslavement for everyone else.
I’m afraid Austrian theory has done a fabulous job of sounding erudite, sophisticated, enlightened so that reform-minded people are naturally drawn to it. So it’s going to take a miracle to wake up the very people we would need to change this system.
@Damon,
Another way to look at it is that the neoliberal/libertarian paradigm is as merely a recasting of the divine right of kings: the infallible, all-knowing, all-seeing “free” market is god, and the kings are those sitting at the top of the economic ladder. These titans could not have achieved such lofty heights unless god the “free” market (hallowed be its name) had willed it, so none can challenge their right to rule.
http://en.wikipedia.org/wiki/Divine_right_of_kings
@Tao – How is the Austrian School a “neoliberal” system? What’s “neoliberal”? The Austrian School goes back to Carl Menger and focuses on voluntary exchange, property rights and non-intervention. How does this anarcho-capitalistic system lead to serfdom? Heck, Hayek is not even considered an “Austrian” by those practitioners.
Also, I’d check some readings at Mises.org or Lewrockwell.com about various ideas around 100% reserve banking or free banking as Hayek recommends. I don’t see how you’re making the claim that there wouldn’t be enough capital. Speculation is fine as long as credit is not expanded artificially to ridiculous levels. From what I’ve read, a gold backed currency keeps govt’s in control and makes banks honest (well as much as possible). If a bank decides to increase paper currency tied to gold, then it’s purchasing power will decrease as the public becomes aware through accounting reports. (Can you point me to your ideas around another type of monetary system?)
In the end, Damon is dead-on…we need psychological and spiritual awakening centered around interdependence and impermanence as any system can be tricked by unscrupulous, narcissistic sociopaths.
Thank you Ranallo for having some common sense.
“bureaucracy can NEVER occur in private enterprise,”
Give me a direct quote or make a more specific statment. There is corporate bureaucracy if that’s what you mean, but Mises is saying that government intervention (outside prosecuting fraud and theft) in private enterprise is harmful in the long run.
“What do you call it when another government owns your country’s means of production? “Free” trade!”
Incorrect, that’s what the elite may call free trade, but that’s not what free trade is!
“Austrian theory and libertarianism taken to their extreme justify monarchy”
How Damon!? This kind of unsupported statement shows utter lack of understanding of Austrian theory and libertarianism. Moderate Democracy can justify monarchy when the masses vote for it.
Austrian theory does not prevent people from being charitable, forming voluntary communism, or persuading others to strive for the “common good.” All it does it get the government and the power elite out of the way.
The Austrian school promotes economic liberty for every individual. There is dichotomy of truths.
Hey Damon,
Nice article. I love all the you tube videos, too. I have to say they rocked my world a bit. I’m still trying to figure your whole theory/scheme out, but I can’t discount your hypothesis out of hand. Lots to chew on here my friend.
You keep ragging on Harvard alums. Do you really think Harvard is the nidus of the infection? I want to take you seriously, but it seems narrow-minded of you to constantly be picking on the Ivy League crowd. (Not that really care that you rag on them. I’m a state U grad myself.) There’s a lot of moving pieces in this world, and not that I doubt Harvard alums and the CFR control quite a bit, but there has to be a little more complexity and multilateral inputs than just them. No? Names some names, point out the frauds, and the illegal/unethical connections you’re aware of.
I’ve never really thought of money as debt. That was sort of like taking the red pill for me reading your stuff. I see money differently now, but I’m not sure the jubilee forgiveness of debt would be taken seriously by most people, let alone creditor nations. On the other hand, I’m can think of how all that debt could be unwound either, too many borders, bodies, and national interests crossed either way.
I do agree that the banks are taking over the world, however. Damn ‘em.
I will follow your work with interest. Keep it up.
well it’s an attempt at satire…guess I’m not funny.
But no I don’t intend to rag all Harvard alums, however I do want its undergraduates, MBAs, JDs to reflect on their indoctrination in the amorality of neoclassical economics and realize the truth about the monetary system they were never taught. (I did point out that fraud…perhaps you’re not realizing the pervasiveness/destructiveness of it if you’re suggesting I still need to point out fraud)
I’m also interested in punching a hole in the moral authority of the institution itself, the neoliberal crap it promotes, and the specific grads who are driving the economic system (Rockefeller, Summers, Rubin, Paulson, Dimon, Blankfein…want more names? there are hundreds, but these should give insight into who I’m talking about). But of course there’s plenty of people from other top schools…Neel Kashkari was a Wharton grad. Geithner is Darthmouth. The Chicago School boys are quite famous. etc etc. They’re all part of the same economic establishment.
Harvard puts a lot of effort into PR/marketing strategy to inflate its institutional gravitas. So it’s entirely appropriate to point out truth rather than letting PR fiction stand unchecked.
How about we finance the Revolution through sales of a new board game: MONOLY !
It’s a lot like MONOPOLY, but without the OP. It’s played with real money and leaves OP out of it.
MONOLY would be far more expensive but think how much more exciting it would be. Talented players could use it to pay off their student loans from prestigious universities. Losers would re-distribute wealth to the elite Winners and OP could then tax the Winners to pay off the National Debt.
Problem solved! Utopia, at last !
“Feudalism, facism, socialism and communism are merely distinctions with no difference”….from ONE PLESANT DAY IN RUNNYMEDE.
“Socioeconomic systems are falsely presented as a spectrum by the political science establishment. In fact there are just two polarities. Either you have private property, freedom and democracy or you don’t. No political or economic system occupies the middle ground for long”….from NOTHING UP THIS SLEEVE.
The false paradigms that surrorted these frauds are rapidly falling. (google the caps)
With the global elite in a race against time to enforce their draconian eco-fascist agenda before more of the public realize that the entire climate change con is a rigged game, alarmists are getting increasingly desperate and transparently thuggish in their rhetoric.
The mask of the man-made global warming movement is slowly being ripped away to reveal the true nature of what we face – a gang of hardcore control freaks who have hijacked well-placed environmental concerns as a vehicle through which to enact their religion of death – eugenics.
This was exemplified earlier this week when Bill Gates was caught in a controversy after he advocated the use of death panels to make rulings on denying health care to the elderly. Gates’ justification that killing old people could save money to preserve jobs was a classic case of social cannibalism, the end justifies the means, and it revealed the true nature of the eco-fascist agenda.
The Bill and Melinda Gates Foundation funds vaccines for the third world to the tune of billions, and yet in his own speeches Gates has advocated using vaccines to lower global population, all in the name of reducing CO2 emissions and combating global warming. In other words, Gates invokes the vaccines he funds in the name of improving health care as a tool of forced sterilization.
Gates’ call for death panels was mimicked by a September 2009 Newsweek article entitled “The Case For Killing Granny,” in which writer Evan Thomas made the case for rationing health care by denying old people treatment.
The eugenicist health care argument shares a central parallel with the environmentalist screed – using the threat of artificial scarcity to uphold the role of the state as an authoritarian re-distributor
This idea is embraced by a growing cult of climate change cult members, who are openly calling for freedom to be crushed and humans to be exterminated in the name of saving the planet.
Top environmentalist and creator of the Gaia hypothesis James Lovelock told the Guardian earlier this year that “democracy must be put on hold” to combat global warming and that “a few people with authority” should be allowed to run the planet.
In a recent book, author and environmentalist Keith Farnish called for acts of sabotage and environmental terrorism in blowing up dams and demolishing cities in order to return the planet to the agrarian age. Prominent NASA global warming alarmist and Al Gore ally Dr. James Hansen endorsed Farnish’s book. Full article at: http://www.infowars.com/eco-fascists-call-for-tyranny-to-enforce-draconian-agenda/
Re: End Game Complete Video: http://www.youtube.com/watch?v=x-CrNlilZho&feature=player_embedded
Re: The reasons why, we must vote out, Establishment Government Representatives, whether they are Left or Right – Incumbent or Candidate on these Congressional Elections on November 2, 2010! Get ready to start kicking corrupt butt with your votes & ballots folks! Be sure to have your Top Computer Savoy Security at all Computer Polls and Best Security at ballot boxes!
Make sure your candidate or incumbent, does not belong to any of the Global Elitist Organizations: Bilderberg Group, Trilateral Commission, Council on Foreign Relations, Club of Rome, Skull and Bones, Canadian Council of Chief Executives,
Harvard Elite Players, Goldman Sachs, International Monetary Fund, The United Nations, World Health Organization, World Trade Organization.
The reason we must vote out Establishment Government Representatives whether they are Left or Right, Incumbent or Candidate is explained on this 2 minute News Clip below: TWO Party Paradyne System News clip:
http://www.metacafe.com/watch/2824363/the_obama_&…
Damon;
Thanks for the explanation on the mechanics of imperial control; but what I was suggesting was a means to deprive the Controllers of their most powerful tool: the personhood of a corporation. Non-persons could not act politically as they do now without personhood and the owners would be forced to reveal their exact ROLE in the exploitation. THEN we’d have identifiable targets at which to direct our displeasure. Hasn’t it yet gotten to a point where we can name names and prosecute these usurpers for TREASON? If they’re hiding behind their Constitutional Rights to privacy, isn’t it time to pull back the curtain and hold them individually and PUBLICLY responsible. Not saying it would be easy, or even doable, at this point but shouldn’t we try while we still have the framework of a Democratic Republic? A class-action lawsuit perhaps? Or Constitutional Convention?
It still seems easier to correct mass mis-interpretation of “fictitious person” than the alternatives.
Check out The Hidden History of Money and Usury at http://www.lulu.com/content/165077
Marvelous, Mr Fahlberg, of the Fahlberg Institute, my hat goes off to you, because I can unfortunately sound too stuffy for my own tastes even… I am best in small doses…
I agree with you about the definition of corporate entities.
Since I firmly believe that IDEAS are the horse that draws the cart of economic life, and not vice versa, I think that if we got rid of the current CONFUSION/AMALGAME between physical, flesh and blood PERSON, and abstract, institutionalized CORPORATION… some SANITY would return to our economic life (the life of the home, etymologically).
But in terms of the question of the responsibility for all this madness, I would like to return also to the structure/organization of the mutual fund, which is all about.. spreading RISKS thin, while multiplying ANONYMOUS investors… Well… you can’t spread risks thin without.. spreading responsibility thin too. Eventually…. the question of ownership itself becomes so anonymous and dematerialized outside of the realm of the FLESH AND BLOOD lord (sorry, but there was no Internet around in feudal times…) that we no longer really know who the owners are. AND.. do THEY consider themselves owners ? What does it mean to OWN, when you do not own LAND (the point of the feudal system, and the intrinsic source of value) but dematerialized filthy lucre that goes from one place to another, and sifts through your fingers like water ? Big philosophical questions that we have lost the capacity to handle because.. we have, to a very large extent disqualified philosophy as a meaningful approach to problems. (I believe.)
From day one in society, I fear that voluntary servitude has ALWAYS been our major problem.
And telling ourselves cute little stories about having our cake and eating it too…
“spreading RISKS thin, while multiplying ANONYMOUS investors… Well… you can’t spread risks thin without.. spreading responsibility thin too. Eventually…. the question of ownership itself becomes so anonymous and dematerialized outside of the realm of the FLESH AND BLOOD lord (sorry, but there was no Internet around in feudal times…) that we no longer really know who the owners are. AND.. do THEY consider themselves owners ?”
Owners are owners; they stand to gain if the corp makes a profit or lose if it doesn’t. They should be held financially responsible for the actions of the corporation in proportion to their share of ownership.
MANAGERS (and I mean officers and board members) may or may not be stockholders, but they should be held criminally and civilly responsible for their actions on behalf of the corporations they represent. It’s not enough to say “I didn’t know” or “I was only taking orders”. When billions of dollars are at stake, and the lifes-savings of millions of real people are at stake it’s reasonable to expect accountability in regards to corporate leadership. THAT’s why they make the “big money”. Why don’t they play by OUR rules; ie, when we screw up we lose EVERYTHING: back to square one. Why is it when THEY screw up, they get a million dollar bonus and go on to ruin someone else’s life. It’s that UNFAIRNESS that drives peasants to revolt.
Illegitimate personhood, coupled with “limited liability”, have institutionalized a “privileged class” that Thomas Jefferson warned us about and seriously needs fixing. Tax shelters are nothing compared to the “Legal Shelter” provided by corporate personhood. It takes some deep thought but please make the effort – it could save us from economic disaster if we could correct this little boo-boo.
I am a firm believer in fixing problems in areas where they can still be controlled.
I unfortunately believe that industrialisation has introduced the SYSTEMIC problems that make accountability… psychologically impossible for us. It is a nice pipe dream, but our capabililites of representation are limited by our mental structures which ultimately are based on.. our physical bodies in space and time.
And legalistic solutions which have been around since.. Moses, probably Hammurabi, when they become our exclusive approach to these problems, well… they bottom out the law while not getting the job done.
Maybe we could head over to the Fahlberg Institute for a little cocktail ? My throat is getting parched and orbiting in the upper (abstract…) spheres gets a little sterile for me after a while. For you, too, I bet ?
Pingback: Harvard Lobotomized: Modern Economics courses designed to completely hide fraudulent monetary system that hovers above the economy « Anti Oligarch
Debra and others have questioned what the reckoning might look like when we finally begin to default on our national debt. What’s on the other side of national bankruptcy?
There are already some agreements in place, for example the FOURTH WORLD WILDERNESS CONGRESS (held in Denver in 1987):
George Hunt does an excellent job in explaining the 1992 UNCED Earth Summit Meeting, held in Rio de Janeiro, in the following videos:
George Hunt on the Gang behind Earth-Summit Part 1
George Hunt on the Gang behind Earth-Summit Part 2
George Hunt on the Gang behind Earth-Summit Part 3
George Hunt on the Gang behind Earth-Summit Part 4
I strongly suspect that there are other deals and arrangements, some that are secretive. This plan has been in the works for over 30 years and it explains the current “credit crisis” better than the WSJ ever could. If you wonder why we are borrowing our way into oblivion, now you know. The collateral has already been carefully defined and detailed so that it will simply be taken as we continue on the path to debt slavery and a new “feudal” world order.
I know most Americans just don’t understand who the “House of Rothschild” is or that the Rockefeller family is guilty of countless acts of treason and crimes against humanity. Their dark deeds have been chronicled through history but there seems to be an aversion, a disconnect, a delusion, that makes it impossible for most to comprehend.
Many naively think that upon our default, things will be reset and we’ll begin rebuilding. The truth is that our bankruptcy has been carefully planned so that the next prepared phase will begin. Nation states will disappear along with any pretense of constitutional rights as citizens become serfs.
Larry
Growing cynicism over the efficacy of our two-party system would indicate that the electorate is intuitively aware that “something ain’t right”. Not understanding what that is, they’re about to throw the baby out with the bathwater. For now, the segment of our population that directly or indirectly derives its livelihood from corporate enterprise and public employment will unknowingly support Globalism: but when they, too, discover that their freedom has been lost to the amorphous aristocracy of financial elites, they’ll join the ranks of American Nationalists and rebel. When the Tea Party Republicans find out they’ve been tricked into supporting the very thing they despise most they’ll go ballistic.
Is it safe to say that Globalism is more popular in developing countries than it is in the West? In recognition of the evils historically attributed to nationalism is there not an up-side to the diversification of nationalities and cultures analogous to the diversity of ecosystems in nature. Planetary shrinkage, brought about by advancing technologies in communications and distribution, makes a compelling case to advocate for Global Government in some form. Sixty five years of living under the threat of impending nuclear holocaust makes globalization very attractive in many respects but the United Nations has yet to unify mankind philosophically, politically, or economically; and now it seems the Global Cartel of International Bankers is stepping in to impose its own form of regulation and control. In some ways Globalism is a good thing, but in the long-term it presents a whole new set of dangers in regards to freedom and human rights.
Total melt-down could be avoided by re-framing the 2012 election debate as a battle between Globalism and Nationalism. While Globalism is amply represented by both Progressives and Conservatives, Nationalism is not represented at all. The Nationalist Party, if there were one, would advocate the abolition of corporate personhood and demand that corporate charters be written to reflect the nature of their impact on the over-all economy. Nationalists would see beyond the ruse that lumps Mom’s Bakery into the same “Private Sector” as the Wall Street Crime Syndicate . Nationalist candidates would run on a platform of economic reform. The primary plank of a Nationalist campaign platform would be the Congressional investigation and possible prosecution, under RICO statutes, of private banking entities conducting business with foreign sovereigns; the ramifications of which severely affect our national economic well-being. The Nationalist Party would advocate strict governance of corporate charters and enact laws subjecting the financial industry to the same rules our Judiciary adheres to in regards to conflicts of interest. The Nationalist Party, by denying personhood to corporate entities, would put the Treasury Department in a legal position to oversee the operation of the Federal Reserve; the way it was originally meant to.
Don’t you wish we had a choice like that in the next election.
Just as the financial elite have boiled a vastly complex mechanism down to warm- fuzzy- patriotic-sounding-bumper-sticker slogans, the Enlightened will have to phrase the argument for Nationalism in simple terms like “real persons” versus “fictitious persons”. Ed’s Garage, General Motors, JP Morgan, and the Federal Reserve are completely different types of corporation – stop calling them “Private Industry” as opposed to the other half of our Economy, the Government. It’s not nearly that simple: between “Too Small To Tax” and “Too Big To Fail” there should be graduated increments of utility in terms of the benefits they proffer on society in general, like job creation.
It would help to stop referring to the Government as “them” – the Government is “us”, The People (or we should be). Citizens might be stockholders too, but politically they’re entirely different: nowhere does the Constitution enumerate a stockholder’s rights. Having a Government that’s intimidated by its Bank is epısdn umop and sbarwkcad.
The game is over. It ends with checkmate. All discussion of voting, changing systems of money etc. are irrelevant. The folks behind the curtain have been there for centuries. They will be there after we are gone. Feudalism went overt in this country when corporate hiring offices change their name from PERSONNEL to HUMAN RESOURCE. We are nothing but resources no different from cattle, minerals timber etc..
The lords behind the curtain own the entire political system. They own the military. They own the courts. They own the media. They own (as Damon has pointed out) the educational system.
The most popular thread at a website I visit (dealing with economics, energy and environment) is related to firearms. That is really all I need in terms of information.
How do I get to eat the King’s deer without being caught?
Damon,
Are you not aware that the very reason many people go to these elite universities is so that they can align themselves with the moneyed classes. I vividly recall my chagrin and disillutionment upon entering the university anticipating a rigorous search for truth along with my classmates. I soon discovered that most of my classmates had no such goals in mind. They were at university to advance their economic ambitions and climb the social ladder. They strove to become a part of an aristocracy that lived well without soiling their hands with any real work. They drank deeply at the well of Plato’s “Republic” where they learned the ‘noblesse oblige’ of the elites who lived off the labors of those who performed the despised manual arts, and actually convinced themselves that their parasitic aspirations were a boon to those they planned to exploit. Like the slaves referred to in Malcolm X’s biography there are always those who are willing to get out of the fields and move into the big house with the master in order to help him to ‘manage’ the field hands. They are rewarded with with superior creature comforts and status. Of course they are still slaves, maybe even more so.
hi Tim, yes I am aware. I was equally disappointed. Search for truth, growth, learning is for the lower classes. The Ivy clique is about status and gaining access. As George Carlin says “it’s a big club, and you aint in it.”
But there are plenty of people like us who did go there looking for truth. So I’m trying to wake those people up with these articles. There’s this subtle pressure to go along with the status/club thing once you become aware of it because the supposed “best” schools and “best” professors and “science” of economics justify the system. Plus, even if you don’t make it into the ultimate circle where the true privileged few are (the few elite financiers who are aware of how the system works), you’re still in a nice inner circle that benefits from serving them. But I’m convinced most of them subconsciously don’t like this system and wouldn’t do it if they were consciously aware of the evil of the system, i.e. if the lobotomy could be reversed. So that’s my goal.
Damon:
Stick to your new goal. You do it well. I didn’t know they still taught the Dialogs in school. I had to learn Aristotle independently, though I attended “school”. I’ve never seen it in action before. Maybe we can all further our education again, post-Institutionally, on this forum. Thank you.
Debra:
By all means, next time you’re in Grand Junction stop by at the sign of the big Red Herring on Falberg Street where the smoke is thick, the music’s loud, and the home-brude likker is hard. We’re open 24/7 and dissidents are always welcome. Our Saturday night special is Pescado Mysterioso. Women drink for free on Wednesdays. If the Red Herring Social Club proves successful, and a rollicking good time is had by all, we could think about opening franchises throughout the land. We could INCORPORATE. Wouldn’t that be something.
As someone who got put through some fancy schools only to be appalled by how little education I got and how much the process consisted of social climbing and indoctrination, all I can say is “Go, Damon, go!”
Ah, William…
Your most recent missive sent me searching for John Donne, “The Ecstasy” (1633) which I will not quote in full, but only the end :
“…As our blood labors to beget
Spirits as like souls as it can,
Because such fingers need to knit
That subtle knot which makes us man :
So must pure lovers’ souls descend
T’affections, and to faculties
Which sense may reach and apprehend ;
Else a great Prince in prison lies.
To our bodies turn we then, that so
Weak men on love revealed may look ;
Love’s mysteries in souls do grow,
But yet the body is his book.
…”
I am not sure just exactly how we shall do our.. incorporation, but it should prove interesting.
As for me.. I got a REAL HUMANITIES education in college in the U.S. in the 1970′s. Of course… I was NOT studying economics at the time… and not in the Ivy League, either…
I tend to think that since some form of aristocracy is inevitable in society, it is best to create social structures with an underlying ideology that ensure that aristocracy has some… OBLIGATIONS in return for its privileges…But as for getting rid of it.. Someone said that the poor will ever be with us. He COULD have said.. and the rich too…
I think you hit precisely on the point I’ve been trying to make: that real aristocrats, in the historical sense, had a connection to the society that supported them. Under our current system of financial imperialism we’re totally disconnected from Aristocracy. We don’t even know their names but for a few. They, on the other hand, know each other as a community and meet regularly at venues like CFR, Bilderberg, Bisel, and such.
To make matters worse, we’re disconnected from each other. I think that’s what Damon is trying to do here; create a platform for like-minded stinkers to teach and learn from each other a solution to unprecedented imperialism. I think he’s correct in suggesting we get in touch with each other, our families, and our local communities.
The Red Herring saloon was a metaphor for that philosophy of outreach, like Tupperware parties, only friendlier and less materialistic. I was suggesting we have some fun while we’re at it. After a hard day on the front lines of a revolution it’s good to kick back and knock down a few beers, smoke some weed, and dance around like normal folk. You can’t have too many friends in this business.
Sorry about your Liberal Arts education. Maybe you can cure your poetry problem at the Red Herring,…….. “where everybody knows your name”.
WILLIAM…
I will overlook that probably unintended… INSULT you just threw out in THIS… saloon ? (no insult intended here) about my liberal arts education. (Or were you kidding ? HAVING NO BODY, or FACE here makes it hard to read the subtle accompaniments of abstract words…
Have you thought that one of the reasons why “aristocracy” no longer has any “obligations” is because… we have been telling ourselves for SO LONG that everybody is SUPPOSED TO BE EQUAL (translate to : the same…) when a quick glance around us should dispel that NAIVE ILLUSION once and for all ?
When was the last time you heard “the Declaration of the Rights of Man” expanded to include.. the rights and OBLIGATIONS of man ?
That holds.. not only for the rich, but, the poor, and the diminishing middle class among us, too.
Funnily enough, lots of people dismiss many of my ideas as being extremely naive, yet… I discovered a long time ago that naiveté (not an insult in my book) is ALWAYS in the eyes of the beholder, and the people who are quick to throw out this word are often the ones who are.. the BLINDEST to their own form of naiveté.
The utopian IDEAL of human nature that underlies OUR ideas of what our Enlightenment ancestors believed is one that does not withstand the test of observation.
http://www.prisonplanet.com
David Rockefeller called for de-industrialization of America in 1969 – Of which is the result of http://www.infowars.com/record-number-of-americans-living-in-poverty/
The number of people living in poverty in America rose by nearly 4 million to 43.6 million in 2009 — the largest figure in the 51 years for which poverty estimates are available — the Census Bureau said Thursday.
The bureau said in a statement that the official poverty rate was 14.3 percent, or 1 in 7 of Americans, the highest proportion of the population since 1994.It was the third consecutive annual increase, up from 39.8 million, or 13.2 percent, in 2008 .The bureau added that there were 8.8 million families living in poverty in 2009.
President Obama, is a puppet tool of the Global Elite to de-assemble America! Re: http://www.documentarywire.com/obama-and-the-global-elite/ – This documentary exposes the truth behind President Obama and the story of the people who control him and every other president we have had in the past 100 years. You will see that Obama, like Bush before him is a walking contradiction that is used to push the Council on Foreign Relations agenda that is nothing less than a global goverment.
Re: http://www.truth-it.net/trained_to_rule.html – The Elite have trained Republicans and Democrats, that they want to put into the presidency and other government offices as well and some who they have all ready infiltrated into high directory positions throughout America! Those Who Will be Trained to Rule the New World Order Movement Because They Are the Best Puppets Possible Are Carefully Chosen by the Council on Foreign Relations (CFR). Direct heirs will often be set aside from ascending the throne if in their time of training they exhibit frivolity, softness and other qualities that are the ruin of authority, which render them incapable of governing and in themselves dangerous for kingly office. Only those who are unconditionally capable for firm, even if it be to cruelty, direct rule will receive the reins of rule from their learned elders.
The reasons why, we must vote out, Establishment Government Representatives, whether they are Left or Right – Incumbent or Candidate on these Congressional Elections on November 2, 2010! Get ready to start kicking corrupt butt with your votes & ballots folks! Be sure to have your Top Computer Savoy Security at all Computer Polls and Best Security at ballot boxes!
Make sure your candidate or incumbent, does not belong to any of the Global Elitist Organizations: Bilderberg Group, Trilateral Commission, Council on Foreign Relations, Club of Rome, Skull and Bones, Canadian Council of Chief Executives,
Harvard Elite Players, Goldman Sachs, International Monetary Fund, The United Nations, World Health Organization, World Trade Organization.
The reason we must vote out Establishment Government Representatives whether they are Left or Right, Incumbent or Candidate is explained on this 2 minute News Clip below: TWO Party Paradyne System News clip:
http://www.metacafe.com/watch/2824363/the_obama_deception_extra_part_2/
For info :
I highly recommend the book “From Dawn to Decadence, 500 years of Western Cultural History” by Jacques Barzun, an over 100 year old French expatriate sage living in Texas for a methodic, highly entertaining DEBUNKING of many of the prejudices that have been passed down from one generation to the next for time immemorial..
I have learned MUCH from this book that I did not even have access to during my liberal arts/humanities education. (shucks, sometimes I think it is a shame, wasting education on the young.. or on JUST the young. The result of an extremely UNARISTOCRATIC idea that education means getting you prepared to throw down meat and potatoes on the table. Very prevalent in the U.S. these days.)
If we are going to build the new.. Utopia, perhaps we might start by cracking the history books to see where our ancestors… got sidetracked, and what they got right, from time to time ?
Debra:
Going back to your last post: emphatically; no insult intended. It was naive of me to think you could “see” me winking while pinching your butt. My nose is bleeding from the punch of your response just now. And that’s my second problem: I don’t deal with abstracts or poetry very well. Maybe some of the mechanical guys can help me out here, but words create images in my mind rather than thoughts. I vaguely remember a HS course in English that dealt with poetry; I flunked miserably. Likewise Philosophy 201- logic. Go figure……..
For instance: relative to aristocrats and their connection to the peasants, I visualize Prince Reginald charging headlong into medieval battle, sword blazing, to find his army never left the starting line and he’s alone in a world of hurt. Is that image a metaphor or an analogy and does it matter? To me it has meaning., however, and illustrates the fragility of Governments in general. Without the peasants they’re desperate loners; and naive, to boot. Is it naive to feel empowered in 2010? Maybe a big dose of naivety is just what we need. Let’s open a can of it. I can smell it already. Mmmmmmmmm ! Smells like fresh freedom.
The media goes on and on about the unemployment rate without mentioning the millions of middle-class self-employed who don’t qualify for any benefits and get sort of lost in the statistics of foreclosure. They, especially, need a heaping helping of naivety. The Utopian ideal of human nature DOES withstand the test of observation. Human nature, en masse, expresses itself periodically through revolution. Revolutions are historically fought with the weapons appropriate to the times and three steps forward -two steps back – is the general pattern but I look at that one step as progress and appreciate it. No one knows how revolution will be fought in the Information Age but Media seems to be the weapon of choice right now and the idle middle-class are again the “usual suspects”.
I realize you can’t hear the inflection of my voice but try to visualize the fire of revolutionary zeal blazing in my bloodshot eyes contrasting the genuine warmth in the corners of my up-turned lips wrapped around the Bowie knife in my teeth as I viciously stab my right index finger into the keyboard, striking deep into the heart of “fictitious persons” everywhere.
As we begin to uncover the nature and machinations of the puppet-masters I expect we’ll begin learning more of their names and addresses. Whoever heard of invisible Emperors? That’s a new one; but I think we CAN stop them; once we identify them. We should at least make them very ashamed of themselves. At most we could hold them liable for Treason.One man’s naivety is another man’s positive thinking.
Thomas Paine made a compelling argument for revolution using historical references going back to Hammuraby (sp?) I’m trying to made a simpler argument going back to King Edward’s use of Letters of Marque as being the first instance of overt sovereign sponsorship of private enterprise and how deeply that concept has been embedded in our culture since then. There’s nothing “natural” about the laws we create; they’re nothing but convenient solutions to fit particular circumstances. Technological circumstances change every few centuries and this one of those times again. We need another way of modelling Capitalism.
From the time of the sophists of ancient Greece, language has been used to obfuscate rather than to enlighten…this, of course, in the service of perceived personal interest. We see that the ancient art of rhetoric as taught by these antique teachers of the children of the rich is alive and well in the modern halls of academia where those aspiring to ‘the good life’ are tutored in the fine points of logic-chopping. These students then go out into the worlds of law, media, and education and apply their skills to the creation and maintenance of the myths that serve the ruling classes. They, in consequence, are then admitted into the various levels of the lesser and greater nobles. Thus it has always been.
Their great teacher, Plato, taught them of the natural necessity of a ruling aristocracy in poly sci 101. Plato, himself of aritocratic birth, despised democracy and taught that the masses must be educated into an acceptance of the order of his ‘Republic’ by means of what he termed the ‘noble lie’. It is this noble lie that is even today promulgated by the educated elites in support of the dominant paradigm.
If contradictions and assumptions are repeated widely and often enough they become part of seldom questioned ‘received wisdom’. I would like to point out some of these confused assumptions and definitions in future entries to this blog but must end for now.
The fable which they sell as “Finance” or “Economic Theory” might very well be a load of crap.
People believe in an Economic Theory in the same way they believe in a God.
People read the bible and they read anything into it that they want. The myth is carried on from generation to generation. But, it is still a myth.
Each theory is just another brand of religion where an economist claims that God is speaking directly to him.
In ancient times of kings and queens, they used to have court magicians.
Nobody knew or understood the magic.
And the magicians even dressed differently than others of the court. (As bankers do today with suits and ties.)
Calm
William, I vote for Calm, who succinctly made a pertinent observation about theories and belief (in my opinion).. Except that I would add on “belief in science”, as many people on the blogs manage to disqualify economics as “religion” = unscientific… while maintaining intact their belief in science.
I don’t like that kind of.. naiveté, shall we say ?
I’m rather relieved to hear that words bring images into YOUR mind too…
As far as Revolution is concerned, well… speaking as someone who is LIVING DAILY LIFE on French ground where revolution got a little out of hand (always a risk, right ??), I think I will let Y’ALL do all the grandstanding for revolution.
I don’t think it’s what you’re making it out to be. Lots of… flesh and blood INCARNATED little people (peasants didn’t use to be an insult, why is it NOW ??) disappear in revolutions. Many more poor people than rich ones. Life isn’t fair, right ?
It HAS been a while since there was a MAJOR WAR on American soil, now, hasn’t it ?
Enough time for the succeeding generations to conveniently forget the first hand (or even second or third one..) experience of it. With a few exceptions, of course.
I stand by what I said about the declaration of human rights, or “Declaration des Droits de l’Homme, as we call it here.
Every advantage has its disadvantage.
I have been noticing on the economic blogs that the word “feudalism” seems to elicit some rather.. Pavlovian responses. Why is this ??
Sorry for punching you, William. You must be more ? less ? incorporated than I thought ? What did I say ?? Please.. enlighten me.
As far as language being used to obfuscate… well that is another one of those disadvantages (but a relative one) that comes with accompanying advantages.
It is rather unfortunate that so many people (in economic circles ? scientific ones ?) seem hellbent on taking all the fun out of words, and EVEN disapprove of poetry !
(nobody here, I’m sure).
It is not language per se that obfuscates but the use of language by those who wish to obfuscate. In many cases it is the poets who illuminate and the ‘scientists’ who obfuscate. ‘Science’ (Latin for knowledge) is much more often used in the service of power than is poetry.
Since we are on the subject of language.. I will not use the expression “the masses”. Nor will I use the expression “the final solution”, or crap like that.
Words are POWER. By deigning to use the word… “masses”, you are ACKNOWLEDGING the POWER of that word OVER YOU. AND that it is a COIN that YOU will exchange from within the elaborate symbolic systems that are our words AND our money.
IS THAT WHAT WE WANT TO BE DOING ?
Not me, at any rate. I am NOT part of “the masses”. Even if.. “the system” (but what is that, anyway ??) wants me to feel that way.
The word dates back to the 19th century, NOT BEFORE. Our.. feudal ancestors were not.. “the masses” either. An idea.. totally foreign to them.
Why be ideologically inconsistent and chimeric trying to INTERPRET THEIR world by using our most RECENT words to boot ?
Not scientific in my book. Not at all.
So.. goodbye.. “the masses”… THAT’s not the world i want to be living in…
Debra,
Since your latest post arrived in my email, I assume it is at least partially directed at me. It goes without saying that Plato did not use the word ‘masses’ as he was Greek. But, then, words are merely symbols as you yourself pointed out. The symbol points to a referent and must never be confused with the object or concept to which it points. To confuse the two, which is done quite frequently, is referred to as the fallacy of reification. Much mischief and confusion has ensued from this fallacy. The ancient Buddhist teachers spoke of confusing the finger with the thing it is pointing at. Now words are defined by convention and there are often many synonyms referring to the same thing. It is not the word that is the thing we are talking about but its meaning. One may not like a certain word for whatever reason but that is not germane to the conversation at hand.
My Webter’s Ninth New Collegiate Dictionary refers to ‘mass(es)’ as: “of or relating to the average commonplace man”. Now I realize that ideas like average and commonplace are abstractions, but these are the sorts of terms that people who believe in class employ. And certainly Plato was delineating a class structured society in his tract, “The Republic”. All aristocrats believe in a class of commoners and, according to my dictionary, the terms ‘common people’ and ‘masses’ are synonymous. You may have your own meaning for the word masses, but if we all have our own private definitions of words, communication is rendered hopeless.
You also refer to money as a symbol. This example of confusing the symbol with the thing is one of the most deleterious of them all. This conflation is not an accident but is by design and goes to the very heart of what Damon is trying to communicate.
Historically, money has been a market selected commodity chosen by the people for it qualities such as universal acceptance, portability, durability, and stability of value. Gold and silver have been overwhelming choices as money around the world and money has been officially defined as particular weights of these metals in the U.S. and many other countries both ancient and modern. Accurate weights and measures have been considered a commercial necessity and have been enshrined in law since at least the time of Hammurabi. And since money is involved in virtually all commercial transactions and serves as a measure of value in all economic calculations, it is especially crucial that its measures be accurate and dependable.
For centuries individuals tried to circumvent honest money through alchemy but failed. But the bankers figured out how to get around the problem of honest money by simply issuing paper notes for gold and silver that didn’t exist. A ‘gold note’ was a paper title to a certain amount of gold. The note was not the money but an IOU for the money. You see, the bankers had figured out that only a small percentage of people would seek to redeem their gold recipts at any given time and so felt they were safe in loaning out for interest fraudulent gold notes for which there was no gold. If there was a run on a bank other syndicated banks would temporarily loan that bank gold until the crisis was over. This was all done in secret and was an out and out swindle which stole from the people by inflating the money supply and thus transferring wealth to the bankers form the producers of that wealth.
This very system of fraud now called ‘fractional reserve banking’ is the foundation of today’s financial system. The Federal Reserve, which is a private central bank, is the government created cartel mechanism which gives the bankers the exclusive right to create money out of nothing and lend it at interest, thus subjugating the entire society, both public and private, to debt.
Make no mistake about it, federal resereve notes are not money. They are IOU’s backed by absolutely nothing which we are forced to accept as legal payment for ‘all debts public and private ‘ by legal fiat, which is why it is called ‘fiat money’.
But this scheme is enabled and abetted by the so called ‘economists’ and others who constantly refer to these Federal Reserve notes, every one of which is issued as debt through the banking system, as money and even capital. They are neither. We have no money under this system. All we have is debt. The money was confiscated by the bankers many years ago. With real money the wealth is distributed among the hated masses who hold the money. With bank debt all wealth is controlled by the banksters. These banksters, who some refer to as the ‘financial aristocracy’, are just crooks with fancy educations.
Damon:
“It’s worth stepping back on occasion to consider the progress that has been witnessed in particular academic fields. ……………. Engineering perpetually pushes into new frontiers.
And how does Economics compare?”
Economics has pushed into some frontiers of its own that render any comparisons to feudalism completely invalid. To talk of monarchs and aristocracy in the context of corporate capitalism or financial imperialism leads to so many invalid analogies and linguistic black holes that productive dialog becomes hopeless. I don’t think it’s a matter of obfuscation on anyone’s part; it’s just a failure to recognize entirely new forces that have entered into the mechanics of how goods and services are traded.
Innovative new monetary “instruments” and international banking “agreements”, like particle physics, are creating and discovering all-new “moving parts” dealing with the ownership and control of assets as monstrous computerized data-banks move fiat “money” between nations at the speed of light. Archaic concepts equating the trade of four chickens for a cow between farmers can’t begin to describe the intricacies involved when a corporation from Exopia buys controlling interest in a Wyopian bank with bundles of derivative “instruments” from a Brokerage in Xenon. By the time you could list the new owners of a real asset they’d already have changed five times. Just the single act of one corporation buying another corporation introduces a level of complexity so arcane that only the financial equivalent of a “rocket scientist” could sort out the fine legal points.
Thanks to the sci-fi horror stories of the twentieth century we’ve been amply warned about the possible cheapening of human life that might occur if biological science were ever to create human life or a market for their replacement parts. The moral hazards, thus foreseen, were widely publicized and laws have been enacted to prevent us from even starting down that slippery slope. Unfortunately, sci-fi writers in that era didn’t speculate much about mad financial scientists, in secret laboratories, creating fiat money and the moral consequences of a runaway banking system. We didn’t have many sci-fi writers in the nineteenth century but they would surely have warned us about the horrifying consequences that the creation of “fictitious persons” could wreak. If they had, they might have so frightened the People that laws would have been enacted to prevent any research into the creation of corporations, much less the derivative marketing thereof. Both prohibitions, coincidentally, concern the creation of new “persons” or prolonging the “life” thereof.
As to economics ever becoming a real science (deserving of sci-fi writers’ attention), the answer would depend on whether or not humans could ever reproduce, legislatively, laws that operated as inexorably and repeatably as the laws of Nature. Harvard and the Church may someday have to debate the reproductive rights of laws, but so long as free will plays a pivotal role in the behavior of fiats, the religion of Economics will forever be as religious in nature as Politics.
Churches don’t preach about the sanctity of personhood the way they do about human life. Religion has debated the issue of precisely of when human personhood begins ad nauseum but totally ignores the question of when corporate personhood begins. So it’s come down to this: it’s not OK to create real human life; but it is OK to create fictitious life (in the form of corporations with human rights). Immortal life is OK. Mortal life is not OK. Why? Because people can understand microbiology, that’s easy; like particle and astronomical physics. You need a Harvard education and a really nice suit to sell the idea of Free Trade as a science when it’s clearly not. I think you have to join a skull and cross-hairs cult to learn the *disappearing-in-a-cloud-of-smoke trick*, though.
No, not ALL money comes from debt. Fractional reserve banking makes money out of debt. Fiat money is the most permissive of debt based money.
With your logic, all voluntary trade comes from debt.
Where did money come from?
Tim, I don’t know why my comment ended up in your E-Mail box.. computers are mysterious objects to me… I was not pointing a finger at you at all.
I am writing about language… on the Internet at this time. I used to be a Lacanian psychoanalyst in France, and spent quite a bit of time studying it academically. But even before I started studying it in academia, it was one of my passions.
I tend to think that language is a CLOSED system. Which means… we should leave the “referent” where it is. (Things are much more complicated than that, but it starts out that way.) And language is complicated by the fact that pointing fingers at objects is one thing.. pointing fingers at concepts ??? I don’t understand. That doesn’t follow, in my book. Concepts ARE WORDS. They have.. no existence OUTSIDE the symbolic system of language.
Money is ANOTHER symbolic system which is TRIBUTARY to language. No language.. no money. One derives from the other. That seems pretty.. logical in my book. I have said elsewhere that language is the mother of all our symbolic systems, and its STRUCTURE constitutes the underpinnings of all our other symbolic systems (like numbers, another symbolic system).
My comment on “the masses” posits a similarity/analogy between pieces of silver (good choice, I think…) and words. We are exchanging them all the time. Pronouncing, writing a word is… GIVING IT CREDIT. (Yeah, that’s EXACTLY WHAT I SAID, and I am not using.. an analogy here at all. It’s the real McCoy.) Pronouncing a word is declaring to oneself and to others that one BELIEVES IN that word, and that one SUBMITS to that word. It is submitting also.. to the POWER that that word holds over the imagination of the people speaking that language.
Oddly enough.. although I resort to quotation marks while speaking of “the masses”, even the quotation marks will not REALLY mitigate the power of that expression.
And I stand behind my belief that it is destructive to exchange, or tender words that one does not believe in, or that one does not wish to give power to.
I am NOT saying that we can do this with ALL the words in our language. Look like that INFAMOUS little word that carries a world in it… “one”.
“One”… is a TOTALITARIAN word. Totalitarianism, before being a political entity is an effect of our language and we can’t really escape it, although its forms will vary. I think…
As for money, I have also said elsewhere that ALL money is fiat money, because basically, you can’t build any kind of a social order without TRUST and FAITH, and “fiat” MEANS faith.
The gold question.. well, it just serves to camouflage the fact that all money is basically fiat, and always WILL be.
The issue of fiat money parallels the development of the study of linguistics.
Forty years ago, maybe, it was still possible to find people who believed that there was a MOTIVATED, LOGICAL and not arbitrary relationship between the word “cow” and the animal that chews its cud. No distance between the word “cow” and the REFERENT animal.
But the simple fact of meeting someone who calls that animal in the field SOMETHING ELSE, and even better, going to a place where LOTS OF DIFFERENT PEOPLE are calling that animal something else, that drives a new wedge into consciousness where NAIVETE about one’s own language is no longer possible.
The more we start studying language as object, the less SUBJECTIVE (and naive) we can be about it. The same.. naiveté can be spotted in the fiat money/gold reserve question.
And ultimately, in a dynamic economy, money MEANS WHEN it is exchanged, and it ACQUIRES VALUE at the moment it is EXCHANGED. Does it HAVE value outside of these moments ?? Some people apparently believe that it can be assigned objective value outside of the moment of exchange. I tend to think that IF we attempt to assign objective value to it OUTSIDE of the moment of exchange, we COULD hinder its value DURING exchange. But I’m getting too abstract here, I think, and haven’t really thought enough about this.
That’s why a dynamic economy with lots of exchange is a rich one. In my opinion..
But that supposes that people have FAITH in their exchanges, in the work that produces their exchanges, and in what THEY have to offer to others. And in others too, of course.
Nobody has picked up on what I said elsewhere about our psychological need for MATERIAL and not dematerialized exchange. Too much dematerialization, and too much complexity overwhelm our basic psychological capacities of representation, and take the system down.
Sorry for not being more poetic, William.
I’ll try doing better next time…
I’m not an “Economic Scientist” or whatever.
I follow the subject rather closely though.
I believe that the complete financial system is totally corrupt.
The very fact that the rating agencies (The very cornerstone of the “U.S. Capitalist System”) actively promoted and facilitated the derivatives and worthless mortgage paper “Fraud” proves the corruption found at the very core of “U.S. Capitalism”.
The “Economic System” itself is a “Myth” propagated by “Magicians” who afforded themselves the costs of a higher education and “Purchased” a PHD or an SH?T after their names. The same way that a Christian Preacher attends a religious institution and leaves with a “Certificate Of Christendom”.
Economic “Myth” is “Preached” and “Enforced” by the military and police complex, and when required (and on command), by our religious leaders as well.
Economists perform the same tasks and for the same reason for which magicians played their essensial roles during olden times with Kings and Queens.
It is all a “Confidence Myth”.
The Economist has only one mission is life and that is to further propagate the myth with “Magical” charts and drawings and claiming them to be “Truth”. A successful economist must sell his magic in the same way a Jehovah Witness sells their beliefs.
The Federal Reserve members are no different than the myth of the 12 Apostles at the Last Supper.
Calm
When I mentioned that I follow economics rather closely, you might say that I was well read on the topic.
http://www.pair-annoyed.com:9090/FORUMS–DATABASE/forumdisplay.php?f=25
Calm
Debra,
I will try to make my response as brief as possible but there is much to respond to. So let’s get started. You begin by telling me that “language is a closed system. Which means…we should leave the “referent” where it is.” Does this mean that the language is a thing in itself without any reference to anything(s) outside of itself? It refers to nothing but itself? Are we to believe that words do not represent anything but themselves? No need for those messy referents?
You then go on to amplify that, “concepts are words. They have..no existence OUTSIDE the symbolic system of language.” Are you telling us there is no concepts of love or fourness other than those words?
And again, “Money is another symbolic system..No language..no money” Really? The word specie is the the same as the gold it refers to? You posit an analogy between pieces of silver and words. Are we then to believe that the word silver printed on a piece of paper and the actual silver are equivalent? The creators of fiat money would certainly subscribe to such a conflation.
But wait, there’s more. “Pronouncing is declaring to oneself and to others that one BELIEVES IN that word and submits to that word.” That may be true of one who believes that the word itself is God or magic, as in ‘abracadabra’ or as with those who believe God is associated with only one name. But I think that most of us use language as a tool to denote and connote things and ideas. I find no meaning to BELIEVING in a word. I think that this sort of thing is a perfect example of the fallacy of reification wherein one confuses words (symbols) with things. We see this sort of thinking with those who worship the flag itself, often being quite ignorant of what it stands for.
You declare, ” ‘One’ is a TOTALITARIAN word.” I was under the impression that it was a word describing a number. But I think it’s worthy of mention here that words do become tools of totalitarianism when their meanings are arbitrarily changed. Orwell, in his novel “1984″, decribes how the bureaucrats at “The Ministry of Truth” are busy at work changing the conventional meanings of words in order to eliminate ‘improper’ ideas.
I was surprised to hear “ALL money is fiat money.” and that “‘fiat’ means faith.”
Have you thought about applying at The Ministry of Truth? You could easily do away with that silly distinction between actual specie and fiat money.
And finally you tell us “…a dynamic economy…supposes that people have faith in their exchanges, in the work that produces their exchanges, and what they have to offer to others.” But it is not the productive exchanges that are at issue here in this forum, Debra. It is the stealing from the producers of society’s wealth by bankers who produce nothing but counterfeit ‘fiat’ money. Nobody ever had to pass a law to force people to accept real money, but legal tender laws are always needed in order to institute and maintain the fraud known as ‘fiat money’.
Yes there is a difference between real money and ‘symbolic’ money. What used to be symbolic of the real money, paper gold notes and silver certificates, have been replaced by Federal Reserve notes which refer to nothing. The symbol has replaced the money.
I guess you could say, “Fiat money is a CLOSED system. Which means…we should leave the referent where it is.” In this case it would be the gold stored safely in the basement of the Federal Reserve Bank of New York and owned by the member banks.
Well, Tim, we are in great disagreement here about the nature of language and money.
You may read what I am developing on these subjects on my blog, “Econosophy and Other Musings” which you should be able to find through blogger.
By closed system I mean that the word itself and its meaning/signification are closely bound up in a relationship that EXCLUDES the referent. Indeed, words are “symbols” that we use to talk about the world, but as you say… I have yet to SEE, or TOUCH, “liberty”. I CAN, on the other hand… see or touch a cow. So.. that means that the referent question is more complicated than it initially appears.
Particularly since… I CAN say.. “cows are important”, AND “liberty is important”.
I can put both words in ALL THE SAME CONTEXTS in language, and this difference between the nature of the referents does not appear WITHIN OUR LANGUAGE ITSELF. So… WHAT IS THE REFERENT FOR “liberty” ? Would it be, by any chance.. ONE OF PLATO’S IDEAS ??? No go for me. I don’t believe that. I believe that amalgamating the physical world WHICH WE NAME in our language systems, (to give ourselves power over it, among other reasons) and the concept world that we create THROUGH LANGUAGE itself is fallacious.
The “object” problem is a BIG one. One with enormous room for getting lost.
But… a quick look at all the qualifying words “fat, short, deep, prickly” should give you an idea how… SUBJECTIVE language REALLY is. And always has been.
I stand by all I said above. AND I have arrived at these conclusions after long, hard, thought on the problems and issues involved. And much reading, in my day.
I have also said here… that I do not believe IN (absolute, objective) “truth”.
A consequence of what I just mentioned above.
“Truth” is like.. “liberty”. Last time I checked… I couldn’t touch or see IT either.
A word like “science” is over a thousand years old, AND ITS DEFINITION HAS EVOLVED AND CHANGED to a point that our ancestors wouldn’t even understand you when you talk about science EVEN THOUGH YOU ARE USING THE SAME WORD. “One” is NOT JUST a word describing a number. Go look it up in the dictionary. Its definition.. spans over one page. It is a very polysemic word. I can say.. “one” to talk about a person, the anonymous person of “one says”, for example.
Who arbitrarily changes the meaning of words ? NO ONE individual, that’s for sure. Language is consensual. When changes occur, it is because more than one individual AGREES to change the way the word is circulating in the closed language system, and OTHER PEOPLE pick up on it.
And.. the dictionary is NOT truth. It… gives the illusion of truth, but that is because many people read it… like the Bible, huh ?? The dictionary is written by a person, or a team of people, and constitutes the equivalent of a picture of the state of the language at a given time. But… those words are changing meaning all the time. Even while the dictionary is being written.
Words set off chain reactions in our minds. And those chain reactions resemble the chain reactions… that go on in the economy.
What are you talking about the reification of language ??
Saying that.. language is NOT a closed system with an excluded referent (for the physical world) as I just maintained above is reification of language. In MY book, at least…
And.. talking about the reification of language does not send shivers up my spine.
It’s what poets do all the time. The word… as a luscious, sexy, fuzzy, tempting thing.
Right, William ?
Debra,
You should make our lives easier by entering your blog URL into the “Website” field of the Reply, which should be saved so you only have to enter it once.
Eighteen months ago, I embarked on a journey of self-education regarding philosophy, religion (always an interest, despite being an atheist), myth, linguistics, neuroscience and economics. The purpose of my journey was to understand better the human condition so as to develop a narrative to comprehend and appeal to it in all its incarnations with the goal of creating a real polylogue between people of good conscience of all stripe. (The economics detour was somewhat of a surprise, actually, as was the focus on neoliberalism, which I find so repulsive.)
What you are describing seems consistent with my recent experience. First, people tend to describe (the problem) and then prescribe (the solution). Marx, among others, taught me this lesson. Second, language changes so much from generation to generation that we find ourselves playing what I call “temporal telephone”: time changes the meaning of words so much that we incorrectly rely on historical references as support when, in context, what they say contradicts our understanding (e.g., Newsweek saying “We’re All Socialists Now” to describe corporate bailouts). This means that our description and prescription may not be as sound as we believe. Finally, there are the things I call “useful fictions” (and Soros calls “fruitful fantasies,” I believe) that guide the application of our cognitive biases. Again, this is another factor that distorts our perception of reality.
All that being said, most people don’t have the education or inclination to wax philosophical as we have, nor do they have the luxury of doing so even if they could. The question is not wether our understanding of reality is fixed and infallible, but whether it is sufficent to understand the risk and uncertainty attendant to promoting change.
There, Tao, I hope I have entered the blog site correctly, as I am a computer idiot.
I found your comment really interesting as it corresponds to my own path.
About seven years ago, I decided that I really should start learning something about economics, and started reading an alternative periodical. That led me to a two book master work, as we say, by a French philosopher/economist called Bernard Maris, who has written an “Antimanuel de l’Economie”. Maris is a HUMANIST genius who manages to tie in lots of different points of view on the economic question.
He is at once an excellent ANALYTIC thinker while being capable of synthetizing his observations in a generalist manner. Very important in my opinion. Analytic thought when it goes too far leads to overspecialization, fragmentation, and the expert culture that is under our eyes. But, generalization when it is not intricated into analytic thought goes out into orbit, and is not tied down.
As for philosophy being a leisure activity… well…I vote for having it REVALUED as a meaningful part of our education. And.. what’s wrong with leisure ??
If you’re going to say that its the patricians who do it, well.. i at any rate have no problem with the patricians. As long as they USE THEIR LEISURE TIME in a way that benefits the rest of humanity. Some of their leisure time, at least.
And I say… that the poets definitely do this. The philosophers too.
I regret the golden age when lots of the leisure class (and not just..) wrote verse as a pastime, and didn’t have to sweat blood attempting to live by it…
Success! Your blog is now linked to your handle.
“Analytic thought when it goes too far leads to overspecialization, fragmentation, and the expert culture that is under our eyes. ”
I call this phenomenon the “division of intellectual labor,” and it leads to a lot of blindspots that prevent people from seeing real problems, and even if one specialist sees the problem, they often have no common language with which to communicate the danger they say. The founders of neoliberalism were very wise to pull together economists, philosophers, lawyers and other intellectuals to forge a common vision and a cross-disciplined language.
“And.. what’s wrong with leisure”
Nothing, if you can afford it. I can, so I’ve given myself a two year break from working while I pursue things that interest me. I have another six months to go in my self-imposed exodus from the corporate world, and I’m really enjoying it.
The economy is moving or changing at the speed of light …. Money is invented at the speed of light …. Simple Computer Monitor Blips.
How can anybody or any “Scientist” worth their salt even suggest that they know the trends?
Half the “Information” available is either “Classified” by the Federal Reserve, or “Proprietary Information” and undisclosed because of “Privacy/Tax Laws”.
And …. it is “Light Years” behind.
Find me one human mind upon this earth who can even claim to think and understand at the Speed of Light, and while missing half the vital information required?
Calm
Exactly! No one has ALL the information. It’s impossible, because you’d have to read people’s mind to know exactly what and when they will do something.
This is not a new problem. Even with all our information technology, no one can get ALL of the information.
Now, will anyone listen to someone who considers this unavoidable problem in their economic theory?
http://en.wikipedia.org/wiki/Economic_calculation_problem
“The economic calculation problem is a criticism of socialist economics, or more precisely central economic planning. It was first proposed by Ludwig von Mises in 1920 and later expounded by Friedrich Hayek.”
“Economists” are an “Industry”.
The “Economist Complex” has positioned their industry to replace the Upper Class job lost in the manufacturing sector.
In the past 30 years, “Economists” have created another “Caste” to continue ruling the world.
Upper Class children are now purchasing PHD’s and SH?T’s after their names with the heading “Economist”.
Prior 1982, Upper Class children Purchased their PHD’s in manufacturing plants and processes.
And Worse; the newly formed “Caste” creates its wealth by a form of a tax called “Banking Fee Schedules”.
Economists and Bankers are the most highly paid within our society and their success relies upon holding every citizen as hostage.
Too Big To Fail and Too Big To Regulate.
Calm
Calm
Kyle,
Your point is well taken as to the problem of economic calculation. But this has not stopped the ‘economic planners’ from their delusions of adequacy. They continue to proffer their economic models based upon closed systems of thought that exclude any reference to the real world. They think that their ideologies are the real world. What need for reference outside of the system when your system is the real world?
The father of this sort of thinking in our Western culture was Plato. Plato was what philosophers call a ‘rationalist’. He believed that the truth of the world derived from his world of ‘ideas’, and that the world that we see around us is merely a shadow of this world of ideas. There was no need to actually look at the world itself. And he didn’t.
Plato, an aristocrat, was the father of the creators of all of the ‘systems’ of thought that attempt to be ‘theories of everything’. They are the many ‘isms’ we see around us that attempt to cram the whole world into their abstract theories.
By contrast, Plato’s student, Aristotle, was what is known as an ‘empiricist’ who thought that generalizations ought to be derived from observations of the world around us. Obviously, Aristotle became the father of the empirical sciences.
Von Mises, regardless of what you may think of some of his conclusions, was of a scientific empirical bent of mind. He simply pointed out that socialist planned economies found themselves in need of consulting the data of market economies in the construction of their economic plannings. He, like all economists, knew that the fundamental law of economics is ‘supply and demand’, and that prices are simply the ratio of supply to demand. He also knew that it was price, operating through this fundamental law of supply of and demand, that allocated the use of resources. The price of an iPhone, for example, determined the prices of the various economic inputs and resources that went into the making and marketing of that product. It should be obvious that no central planner could possibly know all of the data required to manage a complicated modern economy. This is why all planned economies are plagued by shortages and do not invent products like iPhones.
Now prices, as I have said, are the result of the relationship of supply to demand through a medium of exchange we call money. It is absolutely imperitive for that money to have a stable value in order to communicate accurate signals for use in economic calculations and planning, whether on the part of individuals or businesses. The use of so-called ‘elastic’ money is the same as trying to build a house with an elastic tape measure. you can imagine the results. When ‘elastic money’ is introduced into an economy, false signals are given and mistaken investments are made.
A perfect example of this confusing of ‘funny money’ and real demand is our recent real estate debacle. Anyone with a fundamental grasp of supply and demand could have seen that real estate prices could not rise at double digit rates while incomes remained flat. There was no real demand there. It was a bubble created by an expansion of credit made possible by a system that allows for the creation of loans and money out of nothing. But many people relied upon the advise of the expert economists and talking heads of the media that everything was sound and prices would continue to go up, up, up, so buy, buy, buy. Had none of these economic savants ever heard of the law of supply and demand?
It is interesting to note that the times of great progress in our history have been times when the empirical, scientific approach has prevailed such as during the Renaissance and Enlightenment. On the other hand, when the great ‘systems of thought’ prevailed such as the Catholicism which supported monarchism and feulalism in times past, great stagnation and suppression were the result.
So what are we to take from all of this? I would say that the better part of wisdom suggests that we look to the facts and fundamentals for ourselves and ignore the experts and purveyers of the whole spectrum of isms, be they religious, philosophical, economic, or whatever. When someone comes to you with their self-contained ‘school of thought’ which requires no reference to the facts of things because everything is contained within their system of symbols or ideas, run the other way.
Calm,
You are correct. Money is now created at the stroke of a computer key. But not by just anybody. You have to have a license to create this so-called ‘money’. You must be a member of the Federal Reserve banking cartel in order to create ‘legal tender’ (fiat money) out of nothing with your computer. Every dollar of this fiat money enters the economy as a loan created by a bank and is therefore legally owed back to the banker who issued it… plus interest. Of course, as Damon has pointed out, there is only the principle put into circulation. Where does the money to pay the interest come from? Why it too is loaned into circulation. So we see that the economy is based upon an ever-increasing debt that can never be paid off because there is no real money to pay it off with. There is only the loaned debt money and every penny of it is owed to a banker plus interest. You may not personally owe it, but somebody does. In order to keep the game going the debt money supply must keep expanding, which is why a dollar today buys what three cents did when the Federal Reserve was created in 1913.
Now this might sound crazy to you and me. But you and I did not create this system. It was created by powerful banking interests who paid off the politicians to produce legislation creating a private cartel known as the Federal Reserve giving banks, who own the Fed, an exlusive monopoly on the creation of what they choose to call money. How did this bank credit (debt) become money? Why by government fiat through ‘legal tender’ legislation. I can assure you that ‘fiat’ means force and not faith as put forward by at least one poster to this blog.
The bankers who created this system are suffering under no illusions as to the distinctions between such ideas as money, credit, specie, and language. They are hoping, however, that you are confused about these matters and enlist the help of economists and other academics to this end. As Damon has pointed out, some are not even aware of their complicity in these areas, but have nevertheless been schooled in and propagate doctrines that help to advance the money elite’s agenda. In most cases pride at seeing themselves as members of the cognoscenti will prevent these self-professed intellectuals from seeing the errors in their philosophies. Make no mistake, I have nothing against intellectuals, only those who are in it for vanity’s sake.
Someone on this blog has lamented the ignorance of history so rampant these days. I concur. A little history of money might be instructive. Originally money was a commodity with its own value established in the market by the people. There was no legal tender legislation required to coerce people to accept this commodity as money. They did so because its inherent qualities made it useful as a medium of exchange One of these qualities was stability of value due to the fact that its supply remained relatively stable. Like real estate you couldn’t make it, although the alchemists certainly tried.
Societies going back at least as far as Hammurabi realized the need for standards of weights and measures as a basis for a viable commercial activity which contributed to the general welfare. One cannot carry on these activities without calculation based upon reliable inputs. If a pint is not a pound the world around there is no possibility of rational calculation or planning or trade. So all developed commercial societies have instituted laws defining and regulating accurate standards of weight and measure. It was no different with money. The precious metals selected by civilizations as money was coined and its coinage defined by weight and purity. The faith ascribed by some to fiat was engendered by the standardization, honesty, transparancy, and stability of the specie acting as a medium of exchange.
When paper money was first introduced it was in the form of notes conferring ownership of the actual money (specie) to the bearer of the note. Even in the twentieth century such notes were clearly identified as ‘gold notes’ and ‘silver certificates’. I have one. It was clearly stated that the note entitled ‘the bearer on demand’ to twenty dollars in the case of a twenty dollar note. Now if the gold note were the money it would make no sense to say that the bearer of the note should be paid twenty dollars. That’s because the note was not money and everbody knew it. The money was the gold coin the bearer was entitled to. And in the case of twenty dollars the coin was defined to be one ounce of gold to a prescribed purity. The note was a symbol that de-noted the gold coin which was the actual money.
But in two steps during the twentieth century, one in the thirties and one in the seventies, the promise to pay the bearer on demand was revoked and we were told that the paper symbol was now the money. Sound familiar? Ah, yes, money as language. The problem with this ‘language money’ is that it is under the total control of of the Federal Reserve banking cartel. They alone determine its value and meaning in their secret meetings. And those in on the secrets are in the position to know where the economy is heading as the booms and busts are largely a function of the expansion and contraction of credit (debt).
If you can anticipate the booms and busts you know when to buy and sell. Have you noticed that the wealth of the nation is being ever more concentrated into the hands of fewer and fewer people? This is not an accident. The masters of the money system know perfectly well the difference between fiat money and real wealth even if you don’t. They know that paper and computer entries are not money but that they can be used through fraud and force as ‘fiat money’, which they create, to expropriate the wealth of others. And they do. They are not at all confused about what is going on. They have planned it that way.
I thought the book “Web Of Debt” was pretty good at explaining what you are discussing.
http://www.webofdebt.com
Calm
U.S. Capitalism Is A Fraud:
There are only three licenced Credit Rating Companies in the U.S..
When the President spends a trillion dollars, it is only these three companies who are licenced to distribute the money.
There are only three “Privately Owned” Commercial Rating Corporations which are licenced to “rate” and/or to distribute government bonds. No government bond is issued without these three companies approving it and getting their usuary/management fees.
No competition allwed in this type of work. Hundreds of other companies have asked the SEC to be licenced and the SEC refused.
A monopy.
Calm
Check-Out who owns these three rating agencies
http://en.wikipedia.org/wiki/Credit_rating_agency
Thank you very much, Tim Healy, for contributing in a very significant manner to my education.
You reminded me of something that I had totally forgotten : the correct etymology of “fiat”, which I associate perhaps understandably, as I presume OTHERS of you out there associate with… “fiat lux”. Not force, Mr Healy. That is a little reductionist. If I am correct here in my association, that expression goes right back to Genesis, and FIAT LUX is.. WHAT GOD SAYS IN THE CREATION STORY.
Why is this significant ? Before you dismiss me as a religious nutto, which I am not… GOD is the one who is ENTITLED to say FIAT LUX, and CREATE LIGHT in the creation story.
That means that.. ONLY GOD CAN CREATE.. certain… “things”… And THE DISTINCTION BETWEEN what God can create and what.. man can MAKE is an absolutely fundamental one to us, as a civilization. And… if we make this DISTINCTION DISAPPEAR in our minds, well.. what happens is what is currently happening in the financial markets, and what the Greek tragedies (and Shakespearian ones…) harp on constantly in the INEVITABLE way that HUBRIS IS PUNISHED by the uh.. gods (or God, whatever you will…).
If we were not spending so much time pooh poohing our literature as a source of VALUABLE KNOWLEDGE, we would not be taking ourselves to the limit the way we are, eh ?
I keep saying to the people who understand, and listen to me.. that the problem of “God” is a structural one that really doesn’t have a lot to do with a big guy that looks a lot like Santa Claus. If you believe that the “God” problem can be reduced to Santa Claus, well.. time to hit those literature and philosophy books that YOU MISSED DURING YOUR EDUCATION.
On the problem of the Federal Reserve and HOW LONG THIS PROBLEM HAS BEEN AROUND… well, it FIRST started getting out of hand when the Catholic Church accepted the IDEA of interest while foisting off the practice of it onto Jewish lenders…back in the 15th-16th century ? (I’m no good at dates…)
Taking interest on “money” transforms its nature from an exclusive medium of exchange into a medium of exchange AND commodity. Not a good idea.
On the idea of “reliable weights and measures the world around” in order for the value of money to be STANDARDIZED… well, our medieval ancestors were not functioning with STANDARDIZED measures yet, and they were STILL trading, and doing business, the last time I heard. Let’s not confuse the standardization/uniformization issue with.. the “faith” people put into their currency AND WHAT THEY COULD BUY/EXCHANGE with it.
As I still like to remind people… the greenback STILL has written on it last time I looked… “In GOD WE TRUST”.
Every word counts there. And if you reinsert the distinction between.. “God” = CREATOR, and “man” =maker, well… the bubble spins down quite a bit.
Ah, Tao… a fellow… DROPOUT ??
I am meeting more and more of them all the time.
As for what you can afford… there is a great deal of elasticity involved there…
It’s not so bad, ONCE AGAIN asking oneself (ourselves ?) what is really ESSENTIAL to our lives, liberty, and happiness.
The answers can even be.. surprising, by the way. And they can CHANGE, too.
Debra,
Each of us has to decide what is important. I’ve been in the crucible, and there ain’t no changing what I view as essential.
And it is impossible to consider myself a dropout when most people I know have no idea how to drop into what I consider reality, which is far simpler than we allow ourselves to think at times.
Good point about “in” and “out”, in my opinion.
Personally.. I would NEVER advance that I will never change my views on what is essential.
You never know, right ??
You know.. it’s odd, but most people I have chatted with on the blogs, or elsewhere do NOT know that Adolf Hitler in “Mein Kampf” speaks of his… long, excruciating fight against his antisemitism before giving in.
I see no reason not to believe him on this question.
My mother in law says… “life is complicated”.
Yep, I agree on that one.
@Debra,
“I would NEVER advance that I will never change my views on what is essential.”
I saw this when you posted to it, but I did not react to it until I saw it again just now.
What is essential is being human, finding what I call “pathos” (e.g., sympathy and empathy) within yourself to the point at which you can appreciate the dignity and majesty of people just being, regardless of their background or accomplishments. Much of our value system has been created to exalt doing something that is economically advantageous for a few over just being a kind and caring person, which benefits us all. I know that there are a lot of bad people out there, that our current system has bred a generation of sociopaths, but I’m not going to give up on my belief that human beings are social creatures, the vast majority of which cannot be sociopaths in order for their society to be possible.
Besides, the test for identifying the hopeless sociopaths is lodged in a blindspot of the sociopaths.
Debra,
This will be my last response to you as I see the futility of any further attempt at communication. I must say, Debra, that I found your last message directed to me all but incoherent. I find it very difficult to believe that you honestly think that “others of you” reading on this forum are thinking of “Let there be light” from Genesis when discussing fiat money. Puleeaase!
Your switching from the definition of ‘fiat’ to its etymology is a perfect example of what rhetoricians and logicians refer to as ‘bait and switch’. The etymology of ‘matter’ is ‘mother’. Are you seriously suggesting that we use the word ‘mother’ when referring to matter in a scientific discussion? You can’t possibly be that obtuse. Or can you?
Last week you suggested that the word ‘one’ had many meanings and suggested that I look it up in the dictionary. May I suggest that you look it up? The first thing you will notice is that the word ‘one’ is an adjective and as such always requires a noun to describe. There are not many distinct definitions of the word ‘one’ given as you suggest but different instantiations of the word ‘one’ used in conjuntion with various different nouns. The examples ‘one person’ and ‘one’; that you provide as examples of different definitions of the word ‘one’ are simply different examples of ‘one’ being used to modify different nouns. In the case of the use of the word ‘one’ to denote a person we see an example of what is called an ellipsis. An ellipsis is a case in which a word that is understood to be there is omitted. In the case of the elliptical term ‘One’ it is well understood that the adjective ‘one’ modifies a noun and that that noun is a person and not a rock, a board, or a turnip.
My point in citing all of this is to demonstrate the futility of attempting communication when the meaning of a simple word like ‘one’ cannot be established. I wish you the best but I find it impossible to have colloquy when there is no agreement on the conventional meaning of common words and no logical coherence. As to what “others of you” might think, I think that those with a modicum of objectivity can certainly see that the emperor is wearing no clothes, even if they’re too polite to say so.
Sorry Mr Healy, but last time I checked it was ALSO possible to say “one says”, or “one does” as a pronoun.
As far as my being obtuse and incoherent, well…
that is always in the eye of the beholder, isn’t it ?
That’s what our discussion is all about, anyway.
I WAS NEVER TALKING DOWN to YOU, Mr Healy, but you seem to think that I was condescending to you.
I had no intention of doing so. But… please check out those history books.
Disqualifying tactics, Mr Healy. The OLDEST “game” in the book…
Every day I see faint signs that there are some in Congress still making Quixotic attempts to restore the People’s sovereignty (Al Frankin, of all schlubs, in this case)
re :
http://www.huffingtonpost.com/rj-eskow/wall-street-noir-moodys-d_b_741364.html
*And always remember that “Snakeoil Ratings Agency” is a corporation and therefore entitled to all the Constitution protections of a presumedly innocent US citizen (only having more, and higher-priced, defense attornies than John Q Public) It would cost the Govt. more to prosecute them than they’d get in fines so, of course, there are no criminal charges – it’s a civil matter, right? Why is there no public outcry over the lack of prosecution in such egregious fraud? Do we have to economically *enlighten* the whole population to expose rampant corruption? Wouldn’t a few heads-on-a-stick
serve as sufficient deterrent to break the back of a global-system-gone-rogue?
Coffee Party held a mock Art. 5 Constitutional Convention Saturday at which one of the speakers in the audience gave an impassioned and well-expressed argument to make a strict legal distinction between real and fictitious persons; taking great care to separate the rights of *stockholders* from the rights of *citizens*. It drew the most rousing crowd-response of the day (until Lessig threw a wet towel over it). I find personhood easy enough to explain to my friends and associates in live conversion but it eludes me still to put it in words on a paper.
When you cut through all the smoke and mirrors, personhood IS a popular issue that doesn’t require a Harvard degree to understand. Buy your “REAL People Go To Jail For Fraud; FICTITIOUS Persons Get A Bonus For It.” bumper sticker here.
In terms of EconoFu it’s got the most leverage, in that it’s the one, single weapon that can slay the Dragon. Personhood, as a political issue, is like Kryptonite to the SuperBank. Instead of this massive frontal assault on all the intellectual territory the Global Aristocracy has already won we should be inventing new concepts and variations on “Intellectual Night Vision”, “Moral Smart Bombs”, and “Special Media Forces”.
One thing I learned as an independent entrepreneur is that Corporations, for all their brute power, are incredibly slow to change and incapable of truly innovating. Even now, they can’t see they’re starting to show themselves for what they are. Once the curtain comes down we’ll see they have no clothes. I’m not sure their system isn’t systemically insolvent, and they don’t see that yet. A smarter entrepreneur than myself will eventually learn how to *Game* THEIR system and he’ll become a proper King. And I’ll work for His Majesty; loyally.
Hi William,
I’m sure you already know what I am about to say, but I’ll say it anyway. The main reason corporations were invented was to shield those who control them from personal liability. And so the ‘legal fiction’ of ‘corporation as person’ was invented. You can enjoy ownership, directorship, and officership in a corporation, paying yourself salaries, bonuses, stock options and dividends and profiting from stock sales and yet be completely exempt from any personal liability. You can use other people’s money by selling them stocks and bonds and even drive the corporation into bankruptcy like the guys in “The Producers” did and yet not be held personally responsible. Your personal assets, even those taken out of the corporation, are beyond the reach of the law.
Now obviously no real person (personal proprietorship) was able to enjoy such legal immunity. And it was for this reason that the wealthy hired the polititions to create a fictitious person to act as a scapegoat. That fictitious person is, of course, the corporation, which offers all of the benefits of business with none of the liabilities. Sweet!
You ask, “Why can’t we do away with these corporations?” Because the polititians work for those who control the corporations. President Obama’s second largest political contributer was Goldman Sachs, and it is that way with all of the important political players of either party, who are awarded with cushy positions working for their masters after leaving politics. One might call it deferred bribery.
And the whole corporate empire is financed by the banks, which are corporations, and the Federal Reserve, which is also a private corporation, owned by the banks, which are given a private monopoly to create money out of nothing. It is no wonder that small business gets gobbled up by the mighty corporations. The banks, which are interlocked with and share ownership with the big corporations, are able to create money out of nothing and lend it to them at the prime rate that the little guy doesn’t get.
So the entire world of mega-corporations is one interlocked oligopoly controlled by a privileged few. And the Supreme Court has held that these corporations are now to be considered as persons where political contributions are concerned. That’s right, corporate control of our polity is now to be legally defined as the free speech of fictitious persons. But how could it have gone any other way, as money runs the show. But the fact that the money has printed on it “In God We Trust” should put us all at ease, shouldn’t it? Some have said so. To be more honest, they should have printed “In Fiat Money We Trust”.
Thank you for saying what you know I know; but did you get my point about the possibility of doing an “end-run” around corporate Media to exercise the last shreds of our Independence; using it to legislate a healthier relationship with our financial service employees. Congress, so far as I know, still has the Constitutional authority to regulate business. The trick is obviously still going to be performing an “end run” with the Media defensive team on the field. Again: it may be the onliest way to do anything at all.
Have we lost our balls since 1776?!
William,
You have gotten to the crux of the matter with your questions. I think Damon started this forum with the idea of exploring the question of what those of us aware of the predicament can do about it.
Traditionally, tyrannies have relied upon control of the media to keep folks in the dark. The advent of the Internet has threatened their control of the conversation…and the powers that be don’t like it. You must be reading the same stories I am about government proposals to get more control over the content of the Net.
You ask a very pointed question as to the condition of our cahones. I must say that I am often disappointed by the reaction of people when I try to broach some of these matters. A lot of people are living by fear. By putting so many in debt, the bankers have effectively muzzled a large proportion of the population who are in fear of losing everything if they rock the boat. Most people today would be in serious financial trouble if they were to be out of work for only a month. Debt is servitude and the bankers know it. And remember, the bankers’ creation of inflationary debt money, which depreciates the value of all money held by the people, is ‘taxation without representation’.
It only took a small number of people, such as Tom Paine, to arouse the population back in the 1770′s. And it would only take a sizable minority of the population to thwart the oligarchs. It would seem to me that the challenge is to state the case clearly and cogently, as Paine did in his pamphlet “Common Sense”, and to find a way to make it go viral, as “Common Sense” did, while we still have a relatively free Internet.
Oh, yeah. It’s a Spanish word…cajones? No darned spell check on this site.
“Carpe fiat !”
and
“I de pimp; yo de ho”
T-shirts will be available soon.
BINGO!!! And thank you Tim. Pleased to meet you. If there are two of us in the world with the ability to see a “way” forward, there may be more. It’s at least a start. I tend to irritate people with my writing but somewhere there has to be a writer who can put this solution in terms the People will understand and be motivated to action. Damon has a brilliant mind for video presentations, maybe he could……………………………………..
I think it’s.. “cojones”.
I prefer “carpe diem” to “carpe fiat”.
About a year ago a lady at my local post office said to me, while I was waiting in line.. “time is money”.
I replied… “don’t you dare believe that for one moment”.
If you lose, spend, whatever that filthy lucre, you can always get more, right ??
Case closed.
As far as “in God we trust” on the currency… one of the major problems with the whole shebang is that… we do not EVEN trust in God any more.
We trust in nobody and nothing.
The print on the currency means NOTHING.. if we don’t believe it, now… does it ? (um, by the way, last time I checked, “credit” comes from “credo” which means.. “I believe”…)
Maybe people here will EVENTUALLY get the point involved in the idea of the structural necessity of “God” to guarantee the system.
Maybe not…
I’ve noticed a number of posts in this thread mentioning “fiat” money. Money has been made very complicated by the continual use of vague and ambiguous terms. For example, you will find 20-30 different definitions of fiat money on the net. The thing that bugs me is that the phrase “fiat money” is casually and incorrectly used to mean “lousy money.”
To make my point, I ask what is “non-fiat” money?
1) Must it carry full intrinsic value? 1)
If this is so, then only coins (we could add beaver pelts) would qualify. The metallic content and weight of the coin would establish intrinsic value. Under this definition, nickels are “non-fiat” money.
The intrinsic value (metallic content) of a 2010 nickel is almost six cents ($0.06). Quarters on the other hand, are only worth five cents ($0.053) – note: minting costs not included.
So, do nickels qualify as non-fiat money? Do quarters? Under such a non-fiat system, would the value of money vary upon the market price of the metal?
If you deposited nickels in a bank, they would become fiat since the money becomes digital and the intrinsic value would become an asset to the bank.
2) Would paper money that is redeemable with gold qualify as non-fiat?
It has no intrinsic value as it is backed by a promise to redeem. Is a promise good enough?
In order to prevent the value of money from varying, gold was arbitrarily valued at $20.67 oz until 1934. The problem was that if the market price of gold went much higher, people could profit by redeeming their money. And, if they suspected that only some money could be redeemed, that could start a bank run. This is exactly what happened when we defaulted on our promise to redeem in 1933 (domestic window closed) and 1971 (foreign window closed).
In 1969, the market price of gold reached $41.28 per ounce while it was arbitrarily valued at $35 oz. Should we be surprised that foreigners sought an easy profit by redeeming their dollars? And, had we simply increased the arbitrary price of gold, we would have instantly devalued the currency. This type of non-fiat money did nothing to stave off the great depression. That depression, like all depressions, resulted by a dramatic contraction in the money supply (1/3 decrease in under 3 years). The specie of money didn’t matter.
3) Is “non-fiat” money that is fully backed by collateral?
If this is the case, then Federal Reserve notes are not fiat money since every dollar is backed by the people and property of the United States. Money out of thin air is a myth; yes it is free to the creating banks but it is fully backed. Why do we solely back money created for profit by banks? At a minimum, we should be paid for the use of our national credit – but inexplicably, we accumulate a national debt instead.
Please scroll up to my post “September 17, 2010 at 1:46 pm” for a description of some of the collateral used to back our money.
To make a long story short…there is nothing wrong with “fiat” money. The bigger questions are who issues it (government or a private bank cartel), who backs it (we the people or a private bank cartel) and who decides how much is needed to maintain commerce, employment and productivity (government, we the people or a private bank cartel).
Larry
DrKirbyLuv,
You are certainly right. There is much confusion on the subject of money. And it isn’t an accident that this confusion exists. Many, working on behalf of the banking interests, have labored long and hard in order to create this confusion. As Socrates of old would have done, let us start by defining our terms.
First, fiat money, as the name implies, is money by official fiat or decree, backed by the force of law. You can read this ‘legal tender’ decree on every Federal Reserve note. Now there is obviously a reason for this legal fiat, and that is because of the very real probability that people would not accept it without legal compulsion. Gold has never been fiat money in this sense because there has never been a need to force people to accept gold as money. Now that’s pretty simple isn’t it? Fiat money is the money of slaves, forced upon a people, and specie (gold) has historically been the money of a free people, as the people themselves have freely chosen to accept it…free to choose, n’est-ce pas?
Although a nickle is today still made of nickle, halves, quarters, and dimes were, until the 1960′s, made of silver, as was the silver dollar of which these other coins were fractions. Today these erstwhile silver coins are now copper and zinc tokens. You will find that those silver coins still in existence now have a value many times their ‘face value’ due to the fact that the bankers have so depreciated the value of their fiat money by multiplying its quantity in circulation.
If bankers were honest, and you lent them a nickle, as you say, the nickle, being lent, would still be yours and would in no wise be fiat money. A nickle lent should be a nickle returned. It should not be returned as a promissory note (federal Reserve note) whether as paper or computer entry. These Federal Reserve IOU’s are,of course, only backed by other IOU’s ad infinitum. If you lend me a piece of gold and I return to you a piece of paper I have swindled you, all talk of faith and trust notwithstanding.
The reason an ounce of gold was divided into 20 dollars is the same reason a foot is divided into twelve inches. It is not to prevent the value from changing but to create smaller increments in order to make the ‘standard’ more useful, be it a foot or a dollar. Also the U.S. was put on a bi-metallic monetary standard and an ounce of gold was set equal to twenty ounces of silver (silver dollars).
To speak of a twenty dollar gold piece as being worth more or less than twenty dollars is to utter nonsense as the twenty dollar gold piece IS the twenty dollars. The only way that one can make sense of such a statement is to accept the banker’s assertion that the twenty dollar gold note, as it used to be called, which was a paper title to an ounce of gold, is now the the real money. That would be like saying that the title to your house is in actuality the real house.
This is and has been the fundamental basis of the bankers’ scam: to get you to accept the fact that their fiat money is real money. They began this confusion through the linguistic legerdemain of using such terms as ‘gold backed money’. This terminology implies that the paper note is the money and is backed up by gold. The ‘paper money’ was never the money but a promissory note to pay the actual money, which was the specie. The next sleight of hand was to remove the specie from the equation altogether leaving the bankers to have a monopoly on an ‘elastic’ fiat money. “Oh hell, let’s just print ‘In God we trust’ on our paper. That should be good enough for the economists and the rubes down on main street”.
And as for people profiting by redeeming their own money, that only makes sense if you believe that the bankers, who have produced nothing but fiat money by the keystroke of a computer, have the right to steal the wealth of those who have produced it by means of their (the bankers’) counterfeiting operations. By the way, the Constitutional proscription against anything but silver and gold being used as money shows no amendment in my copy of the Constitution.
As to the Great Depression, even Greenspan and Bernanke admit that it was the result of enormous expansion of bank credit (fiat money) and then a sudden contraction of same. But, of course, Greenspan and Bernanke attribute these facts to stupidity on the part the Eastern banking establishment and the Fed. No real wealth was destroyed by the Great Depression, it was simply transferred into the hands of many of these ‘stupid’ bankers and their friends who knew what was going down. The Kennedy fortune among others was consolidated during this period. These folks were all ‘stupid’ Wall Street insiders.
The national debt is not inexplicable. Early on in Europe the great banking houses discovered that government debt was the best kind, as governments were able to collect the debt by force (taxation). And if a particular government or party refused to collect and pay the bankers, they (the bankers) simply financed their enemies. You may have noticed that the Federal Reserve Act (to create the fiat debt), The IRS act (to collect the debt) and World War I (to run up the debt) all came about at the same time. No doubt a coincidence.
Why do you suppose deficit spending is so popular, especially by Republicans who achieve enormous deficits through tax cuts? The Grace Commission, appointed by President Reagan back in the eighties, did a thorough study of the U.S. economy and determined that the entirety of U.S. personal income tax goes to the paying of interest on the national debt. The rest of the government is funded by the myriads of other taxes and fees. Do I really want all this debt backed up by my wealth? Do you?
As to the question of how much money is required for the optimal functioning of the economy. Again, this is like asking how large an inch should be for the optimal building of a house. Inches, feet, or whatever, can always be multiplied or divided as needed for the task. The essential thing is that the inch be standard or the planning and building become highly problematical. It is the same with money. If there be no standard weight or measure here economic chaos ensues. I’m sure you’ve noticed.
One of the central myths of the bankers and their economists is that the purchasing power should remain relatively stable. Oh, a little inflation is okay, but never deflation. And, heaven forbid, a gold standard would be deflationary and reek havoc upon us all.
Lets just look at this argument a little closer. If we had a stable money supply and productivity went up, as it has been doing for centuies now due to tecchnological inovation, then prices would fall and the purchasing power of everybody’s money would rise. That is to say, the prosperity of the general public would rise. It can clearly be seen that it is much better (at least for the bankers and their friends) if the bankers are able to dilute the purchasing power of the people through inflation by creating fiat money and lending it back to the people at exorbitant interest rates (but very low rates to their friends and associates). Which is to say, they steal the money from the people and lend it back to them. After all, we can’t have a vibrant, wealthy, independent population…there would be no feudalism and no idle, parasitic aristocracy. And that just goes against the natural order of things.
I’m sure that all of us who see ourselves as superior to the vulgar masses can agree upon this point. Look how easily they are deceived and led. They pay us interest on their own money and give us their children to fight our wars of corporate empire. Surely the principle of ‘the survival of the fittest’ decrees that we, the wily and the ruthless, should rule over the simple and the trusting. Q.E.D.
Tim,
I think you have a point on the psychology of this mess.
I bet the wealthiest 1% is full of psychopaths and other psychiatric defects – people without conscience, “lone wolves” and ones with deficient emotional capabilities – no feeling of love, compassion and – as mentioned by you – a false consciousness of being extraordinary (they are just different, and missing something in their heads and in their instinctive layer).
And so we kind of have the lobotomy in the title again – but from a different view. And it’s obvious that sick persons make a sick system – but it’s completely normal from their view.
So what is also needed is a psychiatric enlightement of the people and the restriction of high positions for these dangerous persons. No punishment needed, no use of that, but the society should have an immunity against this. Also wonder why it’s basically becoming the valuable thing if someone has some deviance. Because we’re ruled by them and they want to form the world like that. It’s time to wake up in a psychological way too.
I recommend reading “Political ponerology” by Andrew Lobaczewski. This book made this clear to me.
Hello Tim,
Thanks for the thoughtful response. We find agreement in that many modern monetary terms are purposely misleading. Definitions can be most helpful in conveying ideas and I appreciate your clarification on “fiat” money:
If one accepts your definition, then I think it would be accurate to say that “fiat” money is seldom used today since most transactions are conducted with “non-legal” tender (though fiat money is available).
Credit and debit cards, checks, travelers checks and electronic transfers are not legal tender. It is ironic that the IRS will not accept “legal tender” (paper or coin money) in payment of taxes, they demand a check.
Many stores will not accept personal checks but most will accept a credit card and all will accept cash (legal tender). Many state and local governments will not accept cash (legal tender), preferring checks instead.
How much would things change if we actually used gold as coined money? Well first, there would be no money since we have no gold in the treasury. And if there were, it would quickly disappear.
Our national debt is over $13 trillion and the interest payments alone were over $380 billion in 2009. At $1,350 ounce, over 8,700 tonnes of gold would be required to pay the interest.
In one month alone, June 2010, the U.S. trade deficit was close to $50 billion. If money were gold, and again at $1,350 ounce, that would require 1,150 tonnes of gold. I do think that in the case of foreign trade, the scarcity of gold money would help make countries balance their trade and end the destructive policies of “free trade.”
But I think you see my point…gold is not a good option to back a national or international currency. There are other ways to back and endow money with value.
Larry
Is a Depression Inevitable?
We find ourselves in a situation where capitalists and the financial industry run our country and many other countries in the world. Over the last several decades the industry has deregulated itself and reduced its tax rates to allow it too concentrate the wealth of the country in its hands. At the same time it has allowed, through globalization, labor rewards to seek a level set by the lowest wage worldwide. In the process, it has destroyed the buying power of the great masses of the world population. To compensate, it has stimulated the demand for debt and hidden risk through the use of collaterization and derivative insurance products. This was a prescription for asset and debt bubbles and ultimate failure of the financial system, which has been prevented from collapsing totally only by the offloading of the debt onto governments.
Keynesians have viewed the rescue of the financial system, through large government expenditures, as paramount, but is it just delaying the inevitable? As long as we have the financial system running governments are we ever going to correct the problem of financial system running governments and bailing themselves out on the backs of the masses? This appears to be a question that answers itself in the negative. Keynesianism, the philosophy of the government stepping in to prop up demand as private sector demand wanes may work for normal business cycles, but does it really work to correct structural problems caused by lack of government control by the people?
A couple recent articles have shown that the incentives are all in the wrong direction, and that concentrated wealth in the hands of a few leads to control of all physical resources and inflation of commodity prices. In a recent article by Henry Blodgett in the Wall Street Journal, he demonstrates how the incentives perpetuate the problem. A recent post to The Economic Collapse blog show how commodity prices are skyrocketing. And, lately there have been reports of the buying up of agricultural land in Africa to take advantage of the rising cost of agricultural products. Where will it all end? Are the masses of the world’s population doomed to be serfs to a small percentage of wealthy capitalists? Or, is another depression necessary to wrest control of governments back from the financial industry? Pick your poison.
Reference links
http://www.businessinsider.com/its-time-for-the-fed-to-stop-screwing-savers-seniors-and-everyone-else-with-money-in-the-bank-2010-10#
http://theeconomiccollapseblog.com/archives/rampant-inflation-in-2011-the-monetary-base-is-exploding-commodity-prices-are-skyrocketing-and-the-fed-wants-to-print-lots-more-money
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I’ve been studying your thesis since my last comment. Seems you have company:
http://chronicle.com/article/Larry-Summersthe/124790/
Thank you for opening my eyes to the Ivy League connection to the debt, fraud, bailout, funny-money cesspool we’re all forced to swim in.
I started my own research into this tyranny. Although I’m still studying your arguments, I’ve found quite a bit to support your views. Thanks for waking me up.
DrKirbyLuv,
In 1913 while most of the Congress was home for a Christmas break, the remaining selected few voted in legislation creating the Federal Reserve System. They called it by that name because they did not want the public to think of it as a private central bank, which it was and is. The stock of this private corporation is owned by member banks and the majority of its directors are elected by these banks. The chairman is always selected from a list of names supplied to the president.
The enabling legislation gave the Fed a complete monopoly over all monetary matters in the U.S. It and it alone has the final say over all issues concerning money and credit. The rights that the Constitution had delegated to the Congress had been unconstitutionally turned over to private banking interests. Now, the Congress had to borrow money from the bankers, who created it out of a simple bookkeeping entry, and we the taxpayers were then obligated to pay this money, plus interest, to bankers and bondholders.
You see, the bankers were given the exclusive rights to the creation of ALL money, and that money was fiat money, whether it was M1, M2, or M3. These various categories cover cash, checking accounts, savings accounts, and lines of credit and loan accounts. But they are all the same monopoly fiat money created by, now computer, bookkeeping entries. The money is all bookkeeping and the various forms are just different forms of conveyance. Just like there are various media for conveying computer data files of other sorts, those banking computer files known as money also can take different forms, but they are all legally deemed money by the powers delegated to the Fed, ergo, fiat money. The money is not the media of conveyance but the legally mandated abstraction conveyed.
Different forms of conveyance serve different puposes. The IRS demands checks so that there will be a paper trail and documented proof of payment. It is the same with other government agencies. Stores shy away from checks because they can bounce, whereas payment is guarenteed once the transaction is appeoved with credit and debit cards.
You are very right about the difficulty of trying to return to a gold standard. I doubt that it would happen barring a complete monetary collapse as there was in Germany in the 1930′s. And you saw what that led to. There is no way around the fact that this nation is bankrupt. The debt, as it stands, cannot be honestly paid back. In order to preserve ‘full faith and trust’, the debt will have to be monetized by the creation of massive amounts of new fiat money which will drive the value of the dollar towards zero and create a massive financial crisis while cheating creditors with worthless money. Of course those who have created this debacle will have long since converted their dollars to real wealth as they are doing today. Stories in the financial press tell of banks converting bailout money and money borrowed from the Fed at zero interest into hard assets. They know their fiat money has no lasting value.
Just to get a little insight into the devastation of the dollar consider this: as you pointed out, gold is almost $1350 per ounce. Just think, if your grandfather had put a $20 gold piece in a jar back in the thirties, it would be worth 67 times that amount today. That’s the amount of purchasing power pilfered by the bankers with their fiat money just since then. And when you look at the M2 money supply today at almost nine trillion dollars, most of which has been created quite recently, you can see the real magnitude of the problem. If it’s true, as the Treasury tells us, that there is a 147 million ounce gold reserve held at Fort Knox, an honest devaluation of the dollar would put gold at about $61,000 an ounce, and that’s just figuring on the basis of M2. The Fed quit releasing figures for M3 in March of 2006, as that would reveal the massive amounts of money created and loaned to foreign central banks, financial institutions and God knows who else. Bernanke refuses to divulge this information.
I have to say that I am a bit of a cynic, as I’m sure you can tell. It seems to me that the real problem is human greed which always seems to subvert any system to its own ends. Mandates, standards and laws never seem to contain this greed. After all, the supreme law of the land, the Constitution, was not able to prevent today’s depressing situation. There have always been the the swindlers and the swindled and corrupt politicians and officials. I think Damon is right. The answer is a spiritual one.
Tim,
I enjoyed your comment (along with the other posts and comments on this site), but I find that many posts and websites who state what you have written don’t go into the great detail of how the Federal Reserve operates. Therefore I have been researching it but can’t find any of the answers on here or Chris Martenson or sites that are similar. There are a few comments I’d like to make, including my doubts and questions for anyone who can fill in the gaps. But before, I’ll expand on what you have written with what I understand.
When a bank joins the Fed, it is a requirement of the member bank to put up 6% of its capital stock and pay this to the Fed. It only pays this once (doubt). Every year each bank is paid a dividend of 6% on the capital it put up in the first place This isn’t related to the net income, but entirely on the amount of stock it holds with the Fed.
When the Treasury sells a security on the open market this is bought by a primary dealer. When the Fed wants to expand the monetary supply, it will buy these treasuries from one of these primary dealers.
When the Fed buys the security, the treasury will pay interest on this treasury to the Fed.
Looking at the 2009 report, the Fed received $63 billion in total interest. Not all of this comes from the interest of the securites, but due to my limited knowledge of finance, I’m of not not completely sure exactly how much of the interest received comes from the government (around $45 billion is my guess).
The dividend paid to the banks was $1.4 billion and the amount that was given to the treasury was $47.4 billion.
So when the Fed buys a security it is monitizing the debt.
My question is how quickly does the Fed buy the security off one its primary lenders and what percentage are bought within seconds, minutes, hours of the original release? If this is bought before the first interest payment has been paid, and the Fed ultimately gives the interest paid by the security back to the treasury, then is the treasury basically just creating new money?
The bank pays money that is already in existence to the treasury to buy the security (the treasury now has the money the bank the security).
The Fed buys the security (the bank reveives the money (created out of thin air) that it paid to the treasury and loses the bond while the Fed takes on the treasury).
The Security is basically wiped out because the interest paid by the treasury to the Fed is ultimately paid back to the treasury.
The treasury is left with the money from the original security sale, the bank has the same amount of money as it had before the buying of the security and the same for the Fed.
How many securities are bought by the Fed this way, and what are the implications of this for the statement, “all money is backed by debt.”
Thank you for any responses in advance.
Jack.
I think my doubts and questions can be answered in one word.
Rollover.
Jack,
I think, in referring to capital stock, you are speaking of the capital invested in the system by the purchasing of stock in the Fed by the member banks. Regardless of the amount of stock purchased, each bank gets one vote. However, the constitution of the system is such that the New York bank always carries the most weight. I will not go into the details of that here as it is not germane to your questions. Let me just say, though, that this capital stock owned by the member banks must not be confused with the reserves of a bank which are technically supposed to be used for determining the amount of credit money a bank can create. These reserves are simply a percentage of the deposits received by a bank. At least that’s the official explanation.
All sales of government securities are handled by 24 bond dealers. The Fed not only can buy bonds from these dealers but also securities in other markets both domestic and foreign. Also, the member banks can and do buy treasury securities. At present many banks are borrowing from the Fed at 0% interest and buying treasuries. These private banks are where the real action is and they return none of the interest proceeds from treasury bonds to the treasury. The Fed returns net proceeds only after its appreciable expenses.
As to when and how many securities are purchsed by the Fed, we are told that these matters are decided by the Federal Open Market Committee, whose members all rotate except for the President of the New York Bank who is always on the committee. Decisions are made at secret meetings and all transcripts of these meetings are destroyed. This was a policy introduced upon passage of the Freedom-of-Information Act in 1970.
It is the Fed that creates the new money on the basis of the received treasury paper. The treasury debt is not purchased with already existing money. This newly created money then flows through the treasury and into the economy where it lands in the various commercial banks and acts as reserves for the multiplication of this new money, by the fractional reserve principle, in the form of new loans. At least that’s the official explanation.
The statement “all money is backed by debt” simply refers to the fact that all money is created in the form of bank loans and is backed by the pledges, mortgages and securities of the various borrowers. There is no money existing in our economy that isn’t ultimately owed to a bank. We no longer have asset money but only debt which is an asset on the balance sheet of the bank and a liability for the rest of us. The banks own ALL of the money as debt owed to them. This is what Damon is driving at with his explanations in terms of the balance sheet.
And finally, you may have noticed that I referred more than once to ‘the official explanation’. This is because of a paper published by an economist named Steve Keen which appears to demonstrate empirically that new credit money is being created before the Fed introduces new money into the market via its Open Market Committee operations. If this is true, then it is the bankers and not the Fed who are determining the creation of new money. The supposedly regulated is in control of the regulator and not the other way around as is popularly supposed. In other words the tail is wagging the dog.
I am including a link to Keen’s study below. I think you’ll find it more than worth your while to digest the data.
http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/
Why can’t we create our own money – as a nation? Why do we borrow paper and digits when we can make our own? Money is just an idea, a social agreement. What gives money legitimacy is the law. Whether that is a king or government, the law gives money legitimacy as legal tender, decreeing (fiat) that it is to be accepted for payment of taxes and goods. Money has no intrinsic value – unless it is a commodity like gold or feathers or rubies. So why don’t we create our own (fiat) money and end the tyranny? We could put images on it that are beautiful – trees, vistas, sunsets – things that inspire gratitude.
I recently received a request for a contribution for someone running for the US Senate. I responded knowing that the chances that she would ever see my email would be about equal to having a meteor of pure gold land in my yard but I felt better after I sent it any way, this is what I said……
Christine,
I will donate to your campaign contingent upon one item, I would like you to explain to me why any nation should be required to borrow money from people that create it out of thin air and offer nothing of value in return, explain to me why this is in the best interest of humanity. When you state that you will fight to avoid a huge tax increase I can’t help but to realize that you are contributing to the perpetuation of the myth that governmental debt is necessary, and that the only option is to attempt to work within this debt riddled monetary system that is controlled by the owners of the Federal Reserve System.
I wonder what would happen if a candidate running for office actually uttered these words…
If you elect me I will attempt to eradicate the foreign interests that have embedded themselves into the US government under the guise of the Federal Reserve Banking system. I will do my utmost to inform the general population of the limitations imposed upon our prosperity as the result of this privately owned debt based money cartel. I will be relentless in my pursuit of eradicating this scourge from our society and if successful the level of prosperity that will be possible will be unequaled in human history.
I will not be afraid to point out the deception that is ongoing every day in the mainstream media, educational system, and governmental propaganda machine. I will work relentlessly towards the pursuit of regaining control of our money supply by reverting back to the principles as expressed in the US Constitution; I will resurrect the awareness of the issue of ongoing financial manipulation by people that are positioned outside the reach of law within our land. I will expose those that desire to grant the Federal Reserve arbitrary regulatory authority over both financial and non-financial intuitions by bringing these people to the forefront of the discussions, and they will be cornered into explaining their fundamental beliefs while justifying why they think it is necessary for the US population to have a government that allows itself to be subservient to those that control the creation of money…..
Anyway, this madness has gone on long enough, if what I described here seems way off base to you or if you are not willing to make the effort required to remedy this situation then you should not be running for office. You are not qualified and the only person that might benefit from having you in office will be you, and you will serve the interests of the general population inadequately. You will end up as most in government do, unaware, inept, and self-serving.
Most realestate is chattel liened property. There is a security interest against it. It is being pledged by the local corporate government for security for the bonds they float or issue. When you buy property you are issued a deed in fee simple, opposed to title absolute. You only have a deed of trust and rents. You only have right of occupancy and right of use; not right of possession and right of property. In most cases you don’t even have the mineral rights. Only the surface rights. Isn’t that a diclosure and due process violation? When you only have a vested interest in property the local corporate government collects tribute from their subjects under the threat of foreclosure. Isn’t that extortion? I call it corporate facism. The lawyer politicians or political hacks are the surogates of international finance. The fraud is so massive. The political and commercial element are in collusion. It’s called constructive fraud. When you have a system based on fraud, it eventually collapses. It falls from within. What do you call a system that has depressions followed by world wars? I call it the personification of evil. The middle class is shrinking and is now the under class, is not asking for a redistribution of wealth; they are asking for a more equitable distribution of wealth where the scales of economic justice are more evnly balanced. I am not against a free enterprise. What I am against is predatory and monopoly capitalism. Excess parasitic profits and usury interest rates must be eradicated from the face of the earth. What ever happen to th philosophy of low profits, high volume? It is going to take major reforms to change the system, because it is so badly broken. One step in the right direction would be to abolish the Federal Reserve and retore monetary authority to the U.S. Treasury to create and extinguish honest debt free money based on a two tiered system of precious metals and barter exchange contracts. The second step is to pass a revalorization bill limiting paper currency debts to 1% of their gold dollar value of $2,000 an ounce gold, reevaluating the currency and issuing new currency at a 100-1 exchange rate, pro-rating all prices, incomes and debts, and charging a 10% exchange rate fee to pay down the legitamate debt. This method would be the most fair and equitable method of paying off the national debt. Even the billionaires would have to pay. There should also be a provision in the bill for debt foregiveness. I guess it really doesn’t matter what I think, because the illuminati bankers worship the golden calf. It’s going to take a grass roots movement to change the government, baing divine intervention, revolution and a military coup. United we stand, divided we fall!
Addemdum to my comment dated 11/2/2010 457 pm
By calling in the currency and issuing new currency, you get all the illicit under ground money and the money that is in off shore banks.
I don’t know the logic of the industrialist that are out-sourcing all these jobs in manufacturing jobs to Mexico, China, India and these other third world countries. One thing that I do know, is that you can’t sell merchandise in a poor house!
I’m glad Damon has stepped up to the plate here. I started reading about the financial system quackery a decade ago but found few if any people to discuss it with. Economists, the experts, didn’t seem to know the basics of money, and most other people can’t quite get it either.
I haven’t got much to add at the moment, as it’s late etc., but I’ll add something in case it spurs a thought or two. I watched the Money Masters video many years ago, which is likely where the term ‘fiat’ grew out of. As Damon points out, there are a slew of myths about monetary reform out there, don’t just believe the first thing you hear.
Fiat means an agreed form or standard that government enforces, it does not necessarily mean fake money, okay? You drive your car at a certain government mandated or ‘fiat’ speed limit, if you like. Fiat is one of the erroneous terms it would be wise to stop using in my opinon.
Most money is debt money, and it is generally interchangeable with sovereign money as Damon has coined it. Debt free money is another term for money that is used as currency but is not on loan. So gold, silver or Lincoln Greenbacks are debt free, or sovereign, or ‘sound’ I guess. Most of our money however, although “created out of thin air” has value because it is created against a very real asset such as a house, a car, a business, land or anything else banks make loans for. It is not worthless paper, but over time with more bank bailouts it becomes increasingly so, since banks have no intrinsic value that I know of.
All forms of money are based on labor, and at this point starting over from scratch might not be a bad idea. Shall we have a vote?