Which is why I think placing all your hopes on an economy that by definition is fake, you're asking to find out "what's the worst that could happen."

That's the important thing to remember, is that the "economy" is FAKE. It is nothing, yet everyone pretends it exists. It simply doesn't. It is not there.

Pinning all your hopes on a lie seems very christian, and very stupid.

To me.

quote:

Originally posted by editengine:
... an industry that is key to the health of the entire global financial system shouldn't be left solely to the capricious boom and bist prone free market. The great thing about the free market is that it allows unlimited capital flow and profit, but punishes inefficient firms severly. What happens when those firms occupy a central role in the global economy, as these large investment banks do?

That's where we must check a few premises. Such as, "Why do those firms occupy a central role in the global economy?"

And, "Have we ever seen a free market?"

And, "Is the punishment of a free market better in some way than government regulation?"

Some have pointed out that "Too Big to Fail" is a terrorist argument. Jamie Dimon and Timmy G. went into the Oval office with the economy strapped to their bodies like a bomb. "Give us more money or we'll blow the whole place up!"

What is the history and source of Central Banking? Stand back from the media wall and see a bigger picture.

Like Boog says, the economy is fake.

Trade between peoples is natural. This present monstrosity is a lie built on a lie. A Neo-Feudal Casino Gulag state.

The core of the issue seems to be the philosophical and political knot at the center of the question, "What is the relationship between individual rights and individual property? Or what is the relationship between political freedom and economic freedom?"

I don't know, but I think it about it a lot.

A big part of this is the lie that Central Banks like to tell: "We stabilize the too wild free market and manage the effects of the business cycle of boom and bust."

The historical evidence and the simple mechanics of the Central Bank scam tell the truth; Central Banks create the business cycle of boom and bust.

Meanwhile, they have replaced the word debt with words like credit, money and capital and confused the whole issue. It's a bizarre alchemy of mixing the real with the fake using simple methods going back hundreds of years.

I know the Catholic Church's history is, uhm, spotty at best, but I think I'm beginning to see why Usery was a sin. "Interest" is a strange (and perhaps evil) concept.

Perhaps?

quote:

"Why do those firms occupy a central role in the global economy?"

Because property is at the heart of all wealth. By securitizing mortgages the large investment banks, not to be confused with central banks which are under federal control, take a spatial fix, where capital is invested in an immovable object like land, and make it into a liquid asset. This creates a debt instrument that can be bought and resold placing such firms at the nexus point of a large segment of global capital flows.

quote:

Central Banks create the business cycle of boom and bust.

No.This is a natural feature of a market base economy of all sorts. In a simple economy, where you produce items for your own use or for the use of a village lets say, you produce only what is needed. However, when you produce for a market the natural inclination is to overproduce, demanding that you then create demand. This can be done in many ways but when you fail to create sufficient demand your capital, stored in commodity form, is destroyed. This is a crash. Understand that you can overproduce ANYTHING. It may be a product like cars or a service or mortgage securities. This boom/bust cycle is a built in feature of capitalism it seems, as it is the nature of a 'true capitalist', in the language of Fernand Braudel, to seek out the greatest profit wherever it exists and to creates new spaces for profit if needed. This means that if a market segment loses its allure to profitability, American furniture manufacturing lets say, true capitalists will redirect their capital to a more profitable region.

An example of this was when Warren Buffet gave a little interview once on why he went to China. He told a story about a chain of furniture stores he invested in. He soon found that Chinese furniture was far more profitable than that made in the USA, so he stopped buying goods from the US and started buying it in China, leading to a bust in the North Carolina furniture factories.

quote:

"Have we ever seen a free market?

Investment banks buying mortgages like crazy to feed a global financial animal that knew no restraint, no oversight, and no emotion other than greed? I think that fits the bill quite well.

quote:

What is the history and source of Central Banking? Stand back from the media wall and see a bigger picture.

I actually study this for a (meager) living.

quote:

Like Boog says, the economy is fake.

Yet it is a necessary fake if we want to continue enjoying the amenities that we all love so much. Cities were born at the nexus points of trade. However once you pass the level of 'simple' economies (think villages and local farms and production) to complex economies (the FIRe services of Finance, Insurance, and Real estate as well as modern large scale manufacturing) you need ways to liquefy capital. So you have debt instruments, credit, securities etc. Changing technology or political realities can alter this landscape but it is surprisingly resilient. Look at a map of steamship routes of the 19th century. Then find a map of telegraph lines from the late 1800s. Now find a map of undersea cables from the early 20th century. Global airlines routes. Human migrations and warfare. The Facebook map. Next a map of today's internet backbone system. The maps are largely identical. This is the real world manifestation of the 'fake' economy.

quote:

I think I'm beginning to see why Usery was a sin. "Interest" is a strange (and perhaps evil)

I don't think you're far off. Sharia law also forbids 'excessive' interest. As does Buddhism. Making money off money is problematic since you really aren't creating anything. You're simply accumulating money and if you understand that money is simply a liquid form of capital and that capital cannot really be created very fast, if at all. So if you are quickly accumulating money it means that somewhere, somebody is losing it. Used to be those people were just brown people in places we never heard of anyway so nobody really cared. Now most of their money is gone to pay off interest to cover bonds issued by the World Bank (or other banking interests that targeted the developing world). The next target was our own middle class. Stripping them of the equity in their own homes and devaluing their labor.

quote:

A Neo-Feudal Casino Gulag state.

Well, there's that I guess.

quote:

What is the relationship between individual rights and individual property

I would say, because my work is largely related to property and everybody thinks their voodoo is the best, that the monopolistic control of property is a key element in making this system work (or not work, or whatever). Wherever capitalism encountered other forms of property control, communal land, public land, collective land, it sought to change that to privately held land. This allowed it to be sold by an individual. David Harvey wrote that, "We live, after all, in a world in which the rights of private property and the profit rate trump all other notions of rights."

I like that, I think it is quite accurate.

A while ago I found a fun little cartoon I have been showing students that does a pretty good job at creating a funny and visual way to examine the system.

If I can figure out how to post flash video it should appear below.

This message has been edited. Last edited by: editengine,

YAY it worked!

quote:

Originally posted by Corso:

I don't know, but I think it about it a lot.

Yeah, don't. It makes you miserable. I purposely read and work at home as little as possible because it just burns you out after a while. It's like thinking about the weather, although you might understand better how rain clouds form and that has it uses you aren't going to be able to change it.

Editengine, I must with respect disagree with several of your points. Just having the conversation is important and, to me, exciting.

I would argue the point that the federal government controls the central bank. I don't believe that to be true. Let me ask, do you think a central bank is constitutional?

"Allow me to issue a nation's currency and I care not who makes it's laws." Nathan Rothschild (Or was it his dad?)

No, none of us have ever seen a free market. Anywhere, at anytime. Unless you're using the black market, I suppose. Any form of central planning, especially a monopoly on debt-based fiat currency, is the kryptonite of a free market.

One analogy that fits, maybe, is a knot. We currently have this great big economy knot and everyone is talking about how it got tied and why it's so big and how to keep it going. Few are asking about the threads, the string or rope that we tied it with.

quote:

Originally posted by editengine:
It's like thinking about the weather, although you might understand better how rain clouds form and that has it uses you aren't going to be able to change it.

Unless you have a crop duster, silver iodide, liquid nitrogen and cement powder.

Then shit gets done...

A really good piece from Der Spiegel on the power and instability of the financial markets.

http://www.spiegel.de/internat...,1518,781590,00.html

The article quotes a German named Vogl who advances a Marxist position about the crises of capitalism. However, the article repackages it as a new idea, shedding the perjorative context of Marxism.

The Network of Global Corporate Control is a paper recently published at Cornell wherein...

quote:

We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers.

Planetsave.com's article about the findings. At the bottom of the article is a list of the top 50 TNC's.

Interesting in that it appears Battinson is a researcher with the Swiss Federal Institute of Technology and a physicist? It was filed with Cornell to some sort of database they have. I think he is seeking publication so it is in the middle of the process of peer review for a journal that Cornell publishes. This really doesn't matter to us though, it seems like a good paper even if I can't parse the math. Most of his other work seems to be on the instability of the current capitalist system.

I would like to raise M3 awareness.

Little bit of background knowledge: We are currently using a system for Money that is referred to as Fiat or Credit Money. Wikipedia article.
In a nutshell, money is created by banks when they issue a credit, once the credit got paid back, the original money is destroyed again. Central bank controls inflation via the base interest rate. It is not quite that simply, but overall, more and more credit needs to be issued to keep this construct going. (Read the wiki for more details.)


Who here knows about M0 to M3?

Source: Wikipedia Money Supply

The definition varies slightly from country to country but basically:

• M0 = The total of all physical currency (incl. central bank deposit.)
  
• M1 = M0 + bank reserves + the amount in demand accounts. (This is basically all money backed up by physical goods.)
  
• M2 = M1 + Deposits + Deposits redeemable
  
• M3 = M2 + Money market fund (MMF) shares/units + Debt securities
  

From below here, my personal opinions:

I would like to call M2 virtual money. As it is not really backed up by existing values, but rather promises. And M3, virtual-virtual money ... as it is a pure virtual construct generated by moving virtual money around.

And that is fine up to the moment where stock-brokers start to convert this virtual-virtual money into physical goods. Effectively the problem is that the bankers, who never created any value, are now extracting real value from the system. And the question is, are there enough values in the system?

If you know go to the Wikipedia article and look at the graphs, what you can see is the difference between real values and virtual ones. In the Euro-zone for example there are more real values behind the currency than virtual ones. Australia for example, not so much.

Here is the interesting thing. Both the UK and the US have stopped reporting M3 values as part of their annual report as of 2006. Goodbye M3, What is the Government hiding?

... now, why would that be the case?

quote:

Originally posted by editengine:
http://www.federalreserve.gov/Releases/h6/discm3.htm

Yes, I know the official reason. Question is, do you buy this reason?

quote:

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.

Keep in mind, the reason why the M3 was published in the past was never because of monetary policy process, it was understood to be a public service.

The Board decided that the cost of collecting and publishing the data outweighed the benefits. Luckily, the Der Speigel article that editengine refered to above was able to scrape something together.

Although I disagree with edit's interp as Marxist vs Capitalist and see this as a conflict between Savers and Speculators. Capitalism usually requires capital, not debt, and virtual-virtual money, as Newro put it, leads to Zynga dollars and foodstamps.

On a similiar vein, I found this little nugget on The Keiser Report: In the last 100 years, the price of gold has reflected a value that would cover all existing U.S. currency only twice. Today, that would require the gold window to open at 20k per ounce.

Buy Silver, Crash JP Morgan - Max

Krugman weighs in on bit coin, compares it to any other commodity, as opposed to a flowing exchange value.

Me, I liked the Obama speech, I am sure I will be met with wailing and lamentations at work tomorrow when I walk in the building... The President and the rest of the nation is still riffing and slamming our Bridge to Nowhere however, and while there is a certain charm to existing in Nowhere, Alaska, and all we can see is Canada from our house...

Thal, speaking of nowhere.... Ever been to Tok? One of my very best friends was born and raised there....