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An Inversely-Correlated Take On Corporate Profits And Dollar Destruction

Tyler Durden's picture





 

One of the more interesting correlations (not causations) to have emerged following the surge in corporate profit margins is that of the inverse relationship between now record corporate profit margins, and net exports & services originating from the US. While we certainly will not imply one is a cause of the other or vice versa, we would be remiss to not point out the irony of what would happen should this correlation preserve itself in an environment in which US exports end up being curbed due to a surge in the US dollar once the frailty of the Eurozone no longer allows the EUR to appreciate on desperate one-time (if recurring) rescue measures. And with China largely ignoring US demands to revalue its currency and import more US goods and services (no laughing), is it safe to say that this chart is the one most direct confirmation that the weak dollar policy adopted by the Fed has had it most proximal impact nowhere else than on surging corporate profit levels (and Wall Street bonuses of course).

Via FRED, courtesy of Matt Stoller

 


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Tue, 05/31/2011 - 14:56 | Link to Comment treemagnet
treemagnet's picture

Fill in the middle and it could be a rorschach inkblot test.

Tue, 05/31/2011 - 14:58 | Link to Comment centerline
centerline's picture

Fill in the middle, with a slight downward bias, and you have the majority of small to mid-sized business.  Treading water and getting tired.

Tue, 05/31/2011 - 14:56 | Link to Comment firstdivision
firstdivision's picture

I am still amazed at times that people did not understand how free-trade was designed as nothing more than to pad corporate profits.

Tue, 05/31/2011 - 15:33 | Link to Comment Cow
Cow's picture

and what do you say to the corporations that competed in free trade environments and did not make profits?

did you fail economics?  get an A in conspiracy theories?

Tue, 05/31/2011 - 15:35 | Link to Comment firstdivision
firstdivision's picture

Actually I minored in econ. you sir are apparently the one that failed out of community college seeing as how China is the perfect example that protectionism works.  I guess someone that lacks macro thinking, such as yourself, may want to learn econ from more than CNBC.

Tue, 05/31/2011 - 17:05 | Link to Comment FieldMarshal
FieldMarshal's picture

Is your last name Smoot or Hawley?  You really should read up on the benefits of Free trade including comparative advantage.  Sure, wages in those industries that are labor intensive will be lowered, as they should in a market economy, but in the end, more people benefit than are harmed.  Just look at the increase in our exports since NAFTA.  Imposing protectionist policies just makes our country poorer. 

Tue, 05/31/2011 - 21:50 | Link to Comment jmc8888
jmc8888's picture

Um yeah, Smoot Hawley is like blaming QE7 for an economic failure, and even then that's a poor example because Smoot Hawley was more of a transition than a drop (not knowing a forrest gump from the trees). The system was already crashed, yet the banksters like Bernanke love pointing out the stuff that 'worked' somehow didn't in the revisionists guide to the great depression.

Now what would happen again if we did protectionism? Well until American companies picked up the slack from the great opportunity they were given, it would be much like what's happening to companies that are dependant on Japan for their supply chains.  Simply put, American companies can't sell as much because they can't buy the parts from somewhere else.  That's called transitory.  In a real way.

I guess you're saying that protectionism cause America to fail from Hamilton to Carter. I mean the great american experiment was FOUNDED on protectionism.  Every real economic advance we've made occurred under a time of PROTECTIONISM.  Sorry you might of missed it, but the last 40 years econoimcally was an illusion. (ever heard of british-east india company? because they were the big free traders then and scalped you)

I love buying all those Chinese goods that used to be made in Mexico, which used to be made in Japan, which used to be made in America. 

Free trade is absolute horseshit.  Yes let's all compete around for the lowest tax rates and the biggest corporate welfare giving out by a country.  Let's ship our jobs overseas by the tens of thousands of industries, and no one will notice when America doesn't have any middle class jobs left.  Oh wait, yeah, that's one reason all of the banksters plans aren't working even slightly better, because the people have been shafted too much for too long, and can't be bled anymore.

So smoot/hawley (a farce of a position to take) is a bigger deal and dissuades us from the facts of 200 years of protectionism?

It's called 'protectionism' for a reason. It protects the country that applies it.

Just look at the 3rd world and all their famine.  You do realize that 50 years ago, countries actually grew their own food instead of importing crap (through free trade) from big agro right?  We saw the effects of money printing on food prices.  Well if any small country had protected its food production from being overrun by 'free trade', many of these countries would not be going hungry now.

Free trade has destroyed industry all over the world in the favor of a select few, who guess what, AREN'T YOU.  So go ahead and slit your own throat, because that is exactly what you are doing.

Protectionism is our friend.  There will always be areas to trade and lots of it.  But certain areas within a society, depending on the society, are off-limits for a reason.

China's use of it is indeed one of the reasons (other is slave wage king/queen) and fixing their currency (you see they protect their interests) that they have boomed and in a span of less then a generation when from small time players, to one of the biggest.  (while your free trade has coincided EXACTLY when America fell)

Reaganomics is anti-american.  It really is.  Unless you are one of the top .001 percent, in which case you're opinion doesn't really count because it's skewed away from reality.   Lots of dead corpses still waiting for reaganomics to trickle down 1 red cent of money from the 80's, let alone everything since.

Oh no...what will Walmart do? Well instead of using sweatshops in China they can switch and sell shit from here! Wow, what a concept. 

You'd also get better quality goods.  It takes awhile for a country to catch up in terms of quality.  Decades in fact.  So really we are importing inferior shit, taking away jobs, promoting sweatshops, using more energy of whatever form to transport these goods much further distances from raw material to finished goods to retail to home, etc, etc, etc, etc.

Free trade has always been a farce....needing small minds to accept the bullshit theory that it was better because they were the ones profiting directly from the screwjob at the expense of well, everyone else.

Oh yes lots of chinese now can work 18 hours a day, 7 days a week in horrible working conditions and pay for rent out of their slave wage before they commit suicide because they can't stand making another iPhone which is 6 months wages. They can't really complain because 1.6 billion chinese they will either a) find another who will become a slave, or b) arrest the guy for sowing discontent.

Free trade was also so great for Mexico, seeing all those great slave wage jobs there for a few years, until someone else decided to screw their people more by offering even lower wages and taxes. 

Free Trade, the world's circle jerk of manufacturing. 

The funny thing is if we just did things the correct way, it would in of itself neuter alot of the advantage China has.  So really they aren't screwing us any more than we are screwing ourselves.  We let china have the advantage, by clinging to this bullshit bankster free trade.  I'll end it here rather than pile on another 20 reasons why protectionism works, and free trade is just bankster sophistry propagandized for far too long.

Tue, 05/31/2011 - 22:42 | Link to Comment Bobbyrib
Bobbyrib's picture

Shit we import from China is of such inferior quality that I consider most of it disposable (1st time use to 1 year of use) to semi-disposable (takes 1-5 years to break down when it used to take a lot longer).

Wed, 06/01/2011 - 09:48 | Link to Comment firstdivision
firstdivision's picture

And you also have to look at our imports (trade gap ring a bell?).  Being the (temporary) world consumer, we should also be the world producer, but we are a long way away from that.  Free-trade is a concept that can work as long as no country holds leverage over another (i.e. level playing field http://www.onlineopinion.com.au/view.asp?article=1606).  We bend over backwards to appease the Chinese to keep buying our debt, so they keep forcing US corporations that want to sell in China to manufacture in China.  Even though the coporation is expanding into another country, our exports remain flat at best.  It really is quite simple and genius for China.  There is no true Free-Trade as what its creator originally envisioned. 

Tue, 05/31/2011 - 15:34 | Link to Comment Dr. No
Dr. No's picture

Free trade benefits consumers.  Imagine the selection of goods if free trade was not available?

Tue, 05/31/2011 - 16:14 | Link to Comment firstdivision
firstdivision's picture

it lowers wage growth and raises the underemployment rates.  Sure stuff is cheaper...but it needs to be or half the population cannot afford it.

Tue, 05/31/2011 - 17:16 | Link to Comment PrintingPress
PrintingPress's picture

>It lowers wage growth and raises the underemployment rates.

 

That's suppose to get innovation started that will lead to higher employment, yet with the caustic business environment in the USA the innovaiton has been stifled and moved to other countires with less caustic environments for business.   You can't have your cake and eat it too, yet this is the policy of the USG. 

Tue, 05/31/2011 - 22:46 | Link to Comment Bobbyrib
Bobbyrib's picture

I don't think the tax policies and the restrictions to do business are the only reasons we don't innovate. Think of developing an idea only to have it stolen by a large mult-national corporation who write our fucking laws. I don't know about you, but I would probably go postal.

Wed, 06/01/2011 - 09:52 | Link to Comment firstdivision
firstdivision's picture

No, the US is still the world leader in innovation.  That is why foreigners come to our schools enmass in hopes to get an understanding to think like a US innovator.  The key reason for moving jobs overseas is margins and dividend growth.  I have always linked the fall of the US to the attachment of the shareholder view over the stakeholder view. 

Tue, 05/31/2011 - 15:43 | Link to Comment Noah Vail
Noah Vail's picture

Those wouldn't be inflation adjusted profits, now would they?

 

Uhm, wait. Lemme think here. How many of the S&P500 actually manufacture something in this nation? Must be at least a couple.

Tue, 05/31/2011 - 15:43 | Link to Comment Bob Sacamano
Bob Sacamano's picture

So the plan is to reverse this graph --- stop importing and push corporate profits towards zero.    That should work out well for the average employee at some non-profitable corporation. 

Tue, 05/31/2011 - 16:32 | Link to Comment firstdivision
firstdivision's picture

Synapse not connection properly, or are you too politically motivated to think beyond your party's economic beliefs?  Let me spell it out for you

A) Never did I say that corporate profits should be pushed to zero (you're making idiotic assumptions there).

B) Wage growth is anemic without goverment sponsored subsides.

C) China is very anti-importing and doing quite well economically (comparatively speaking). 

Tue, 05/31/2011 - 18:28 | Link to Comment Bob Sacamano
Bob Sacamano's picture

"Towards" zero and "to" zero (which I did not say you said) have very different meanings.  Not always, but I try to be thoughtful about word selection.

So you want the import/export line to move up via more "anti-importing" / protectionism (or something) - be more like China presumably.  Which way do you want the corporate profit line to move?  I assumed down, but was apparently mistaken.

I do not see China "doing quite well economically" -- I prefer the US standard of living over the Chinese standard of living for the past couple hundred of years (up to and including the present) -- understanding at the margin the gap is beginning to close (but has a long way to go).  

Tue, 05/31/2011 - 22:51 | Link to Comment Bobbyrib
Bobbyrib's picture

...and our standard of living is sustainable? LOL, how many articles on this website do you actually read?

Wed, 06/01/2011 - 01:27 | Link to Comment Bob Sacamano
Bob Sacamano's picture

Unlikely, since much of the US consumption at the consumer and government level was debt financed and created a fantasy standard of living that is not sustainable.  

Those unenlightened rubes who just said no to debt, lived below their means for many years, delayed gratification, watched others consume more, didn't feel entitled and saved for the future are probably pretty close to sustaining their standard of living (understanding these are antiquated pathetic concepts that as you note not generally found on this website).  Many others will see their debt financed fantasy standard of living decline materially. 

Seems reasonable that those who are more reckless have a different outcome than those who did not presume all will be well tomorrow (which is what debt does).

Wed, 06/01/2011 - 07:32 | Link to Comment Bobbyrib
Bobbyrib's picture

"Those unenlightened rubes who just said no to debt, lived below their means for many years, delayed gratification, watched others consume more, didn't feel entitled and saved for the future are probably pretty close to sustaining their standard of living (understanding these are antiquated pathetic concepts that as you note not generally found on this website)."

Wait until inflation kicks in, these people will most likely be holding dollars that will drop drastically in value (to pay for everyone else's mistakes [overspending]). I believe that unless you are considerably wealthy there is no way anyone who isn't rich will experience a drop in their standard of living. Look at the direction the economy is headed right now. There is most likely going to be a higher unemployment rate within the next few months (double digits by the end of 2012). People with savings will have to use it for everyday living expenses. Again, unless you're rich you're in the same boat as the rest of the middle class, eventually we are all going down. The members of the middle class who saved/invested properly are just prolonging the inevitable...

 

Wed, 06/01/2011 - 16:11 | Link to Comment Bob Sacamano
Bob Sacamano's picture

Inflation tsunami or not, prefer the chances of the guy who lived below means, saved and invested for a long time versus the guy who already has a negative net worth because he felt compelled to borrow lots of money. 

I think the disciplined, paranoid, personally responsible saver (who no matter how much he saves figures it may not be enough) will fare better in most coming economic environments vs the undisciplined, entitled victim class.  Beyond the financial differences, the personal skill set / worldview differences will also likely provide ongoing advantage. 

Or folks can take your view and assume it is all futile and hope / presume somebody else will take care of them (granted they are well represented in government).

We'll see how it turns out!

Wed, 06/01/2011 - 18:19 | Link to Comment Bobbyrib
Bobbyrib's picture

My view is certainly not to presume somebody else will take care of me. I have done what you state will make me better off than the spendthrifts, but for how long will I be better off than the spendthrifts. Eventually we will be on level footing with them.

Wed, 06/01/2011 - 09:53 | Link to Comment firstdivision
firstdivision's picture

Okay, not even x->0 as what needs to be created is sustainability above all else.  I agree that mass consumption (and coporate profits) were overinflated by debt, from an economic view point, it also created the unsustainable society we have today. 

Tue, 05/31/2011 - 14:54 | Link to Comment Jason T
Jason T's picture

Henry C. Carey is spinning in his grave.

http://en.wikipedia.org/wiki/Henry_Charles_Carey

 

 

Tue, 05/31/2011 - 15:24 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

That's the name of the game! Glad that this is stated as a correlation not causal attribution. So I'll make the jump since I'm a simpleton. Dollar destruction = Higher Corporate profits. I'm looking for major profits coming up shortly.

Tue, 05/31/2011 - 15:05 | Link to Comment Cdad
Cdad's picture

Nice.

This chart perfectly illustrates the crime at hand, perpetrated by the banks the sheeple did NOT WANT TO BAIL OUT!  Yet, alive and even larger they are, and preparing their next round of bonus pools, while the sheeple liquidate every last asset they have to simply eat.  

Thank you Hank Paulson.  I always wanted to live in a post apocalyptic society.

And the BlowHorn [CNBC] drones on, shifting from commentary about The Hangover 2 to Kung Fu Panda 2.  Brilliant!

Tue, 05/31/2011 - 15:38 | Link to Comment Mercury
Mercury's picture

Interesting article:

Andrew Dickson White (1832-1918), the Free Silver movement of the 1870's and the monetary policy disasters of revolutionary era France that he tried to draw attention to:  http://www.nationalreview.com/articles/267989/reflections-revolution-france-kevin-d-williamson?page=1

Tue, 05/31/2011 - 15:07 | Link to Comment JW n FL
JW n FL's picture

 

 

we need MORE! tax cuts for corporations..

 

I mean, we need more carry forward Tax Breaks as Corporations are already paying $0.00's in Taxes.. so that the Corporations may carry forward those benefits that Corporations are unable to monetize when over the threshold for the Tax Benefits already used. No Need for any Tax Credits to go to waste!

 

Think of all the Jobs that the Corporations will create when they don’t have to pay Taxes and when their war chests are bursting with new minted Dollar bills!

 

Hurry! More Tax Cuts! NOW! Before the top 1% has to pay any Taxes what so ever!

 

And Please! Don’t forget “The Subsides!” Free! Money!! is GREAT!!! when it’s at the tax payer expense! It is not like the sheepeople will even notice it! They are to fucking stupid!

 

Tue, 05/31/2011 - 15:16 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

The most ironic part, whoever relies on subsidies, tax cuts, 'free' money & similar rather than effective business models and innovation do gain in the short run but they mostly lose in the long run as well. And often they lose a lot (understatement). Our Automakers and Steel are prime examples.

 

Tue, 05/31/2011 - 16:59 | Link to Comment JW n FL
JW n FL's picture

I will let General Electric (who has their bonds backed by the FDIC) know about your concerns for their long term survivability...

 

http://goo.gl/cgg4O General Electric $14.2 Billion in Profits, Pays $0 in U.S. Taxes

$39M Dollar Lobby in 2010 $14B in Profits =’s NO TAXES PAID! http://goo.gl/rZLDY

$10 billion sale of F.D.I.C.-backed debt http://dealbook.nytimes.com/2009/01/06/ge-capital-begins-10-billion-debt-sale/

 

General Electric still has a $2.5 Billion Carry forward I thought I read somewhere but I am not looking.. I am dont want to know how badly I am being fucked any more!

 

as well all of the big oil names will be interested for the same reasons that G.E. would be concerned!

 

Tue, 05/31/2011 - 17:35 | Link to Comment dugorama
dugorama's picture

so why does their stock price suck wind so? 

Tue, 05/31/2011 - 19:53 | Link to Comment JW n FL
JW n FL's picture

with $14 Billion dollar in profits (ish) globally..

 

and with $5.4 Billion dollars in U.S. profits..

 

and considering they pay no taxes.. in the U.S. I could not tell you why G.E. sucks since Jack left.

Tue, 05/31/2011 - 21:42 | Link to Comment tarsubil
tarsubil's picture

Because they are a horrible company that has become devoted to cutting corners to save money and increase short term profits. Their tax and lobby departments have done a bang up job though.

Tue, 05/31/2011 - 18:07 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

Overall I agree. However I am not referring to any near term but rather 20 - 30 years down the road.  Well, I also assume we still will have a somewhat market economy then. (wonder if I am stretching it - market economy assumption.) 

 

Tue, 05/31/2011 - 19:56 | Link to Comment JW n FL
JW n FL's picture

after answering him and reading yours.. I guess that my statement that was drenched in sarcasm.. did not translate well.. my bad.

 

I want them strung up for Treason.. does that better communicate my thoughts about G.E.? You may ask how far down the executive I would expect the prosecuting parties to go.. and I would expect that hangings would occur until we ran out of rope and had to make some more. which is even beyond the executive offices, I would guess! better safe than sorry! wink, wink!!

Tue, 05/31/2011 - 15:04 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

The above is exactly why the investors (and world) out to fear the Chinese bubble.  Usually profits grow because new investments are innovative and allow to produce more out of less. (or produce something new that was not existing on the market place.) Eventually competition kicks in and consumers benefit from the lower prices. In the last decade all of the corporate profits were mostly due to the cheaper labor oversees and improvements in the logistics. However there are limits on how much cheap labor can contribute without improvements in the productivity due to technology. And once those limits are reached, we all will suffer from 'under investment' into the means of production. However those who reallied on the cheap labor will suffer the most. It could be rather significant and mostly invisible economic/supply shock, especially devastating for certain emerging markets. Also such a shock might highly contribute to inflationary pressure. 

Tue, 05/31/2011 - 15:07 | Link to Comment buzzsaw99
buzzsaw99's picture

succinct.

Tue, 05/31/2011 - 15:06 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

cld be an opinion poll.

gay marraige? 

does radiation matter?

Tue, 05/31/2011 - 15:14 | Link to Comment 10kby2k
10kby2k's picture

Just tax the fuck out of those profits to pay part of the defecit. /sarc off

Comment 2: This is why people kill. /no sarc

Tue, 05/31/2011 - 15:09 | Link to Comment JW n FL
JW n FL's picture

http://www.advancedtrading.com/articles/229700193?cid=nl_at_daily

 

Black Box Traders in Dark Pools made to feel “MO!” safer by Monitoring how they get lagged out of the money by the House!! Yay! Faux Safety measure that you can pay for! Then try to litigate over and still end up getting nowhere with!

Tue, 05/31/2011 - 15:17 | Link to Comment ThreeTrees
ThreeTrees's picture

Who in the hell looks at that chart and thinks free markets are to blame?  Shit like this is only possible on a "floating" exchange rate regime.

Tue, 05/31/2011 - 15:21 | Link to Comment alien-IQ
alien-IQ's picture

I'm no economist, have no PHD and have never worked as a fund manager...and even I noticed this some time ago.

How this is, only now, becoming obvious is nothing short of amazing to me.

Tue, 05/31/2011 - 15:29 | Link to Comment TooBearish
TooBearish's picture

TYLER - OT but check this one out - only ZH can get to ther truth!

http://www.eutimes.net/2011/05/russia-says-imf-chief-jailed-for-discovering-all-us-gold-is-gone/

Tue, 05/31/2011 - 15:34 | Link to Comment Tyler Durden
Tyler Durden's picture

Please no more links to "Sorcha Faal" scams.

Tue, 05/31/2011 - 15:48 | Link to Comment TooBearish
TooBearish's picture

Sorry didnt research source....weak sounded so good at first....

Tue, 05/31/2011 - 15:40 | Link to Comment Herbert_guthrie
Herbert_guthrie's picture

Eventually, all positions will be eliminated, as in the perfect corporate paradigm. In the end there can only be one owner of all things, all competition eliminated, all currencies redeemed, and this "worldwide CEO" must then kill himself in order to maximize corporate profits to 100% by eliminating himself, the only remaining labor cost.

On a long enough timeline, etc. etc......

Tue, 05/31/2011 - 15:47 | Link to Comment centerline
centerline's picture

Everything is Taco Bell now...

Tue, 05/31/2011 - 23:00 | Link to Comment Bobbyrib
Bobbyrib's picture

Quit making fun of the greedy, scumbags who sell out the American way of life to make themselves rich as quickly as they can you socialist!

Tue, 05/31/2011 - 15:49 | Link to Comment alien-IQ
alien-IQ's picture

looks like the daily dose of 3PM market viagra just kicked in and the /ES is poppin a woody.

Tue, 05/31/2011 - 15:53 | Link to Comment mayhem_korner
mayhem_korner's picture

Fascinating chart.  Says clearly that U.S. is exporting inflation.  Also, the correlation is clear, but the rate of change differential is accelerating.  I take that to mean printed FRNs give this relationship a lot of leverage.

Anyone else smell a rapid decline of equities just around the (radioactive) river bend?

Tue, 05/31/2011 - 16:02 | Link to Comment Cdad
Cdad's picture

Yes.  The ETF arb trade today is beyond ridiculous.  Gross misallocation of capital must be rectified.  Momentum stock regime change must occur. Etc.

This last hour nonsense is for bonus purposes only. Nonbankers need not apply. 

Tue, 05/31/2011 - 15:56 | Link to Comment Whatta
Whatta's picture

Are derivatives considered as an export when the likes of Squidman Sac sell them to the unsuspecting world. Is that how that curve can possibly be accurate?

Tue, 05/31/2011 - 15:58 | Link to Comment alien-IQ
alien-IQ's picture

a new HOD right at the bell...because they roll like dat.

Tue, 05/31/2011 - 16:48 | Link to Comment css1971
css1971's picture

One of your app servers is dead. Your varnish caches haven't figured it out yet.

You need to enable shorter TCP keepalive intervals and some sort of app server check URL which is tested on a short timescale (say 5 seconds) to pull it from the pool.

Tue, 05/31/2011 - 16:44 | Link to Comment css1971
css1971's picture

Money is exported goods imported. It is a feature of the reserve currency, I suspect other countries non reserve currencies would behave differently.

Reserve currencies are bad for jobs. All the other countries have to buy the reserve currency, which causes the value of the money to go up in the domestic economy. It makes employees and domestically produced goods, expensive, so you export all the jobs to cheap countries and import the cheap goods to improve profits.

During recession, people aren't buying cheap imported crap on credit any more.

I thought this was all obvious... No?

 

Loss of reserve currency status would be one of the best things to happen for ordinary American... Once the chaos dies down.

Tue, 05/31/2011 - 16:43 | Link to Comment max2205
max2205's picture

Where's the line for Corp Profits less mark to fantasy?

Tue, 05/31/2011 - 16:48 | Link to Comment max2205
max2205's picture

Where's the line for Corp Profits less what GE IBM CAT ect should have paid in Federal taxes that Barry left them off the hook for

Tue, 05/31/2011 - 16:48 | Link to Comment Nnthnt1
Nnthnt1's picture

"an inversely correlated take on the number of posts on zerohedge and their quality"

Tue, 05/31/2011 - 16:59 | Link to Comment Djirk
Djirk's picture

that first peak was when about 1/2 of corp profits were from financial services...bet the latest peak has a similar composition?

Tue, 05/31/2011 - 22:04 | Link to Comment kevinearick
kevinearick's picture

Coding the Timekeeper

So, you have a clock with a second-hand gear hitting a minute gear. What if you had smaller and smaller gears tripping the second-hand gear, and those gears went largely unnoticed because they algebraically canceled each other out, except when they trigger the second-hand gear, and, further, there are multiple dimensions of gears, which will allow the second-hand to trigger the minute-hand continuously. Code each stage in the process and then take a look at the machine code. You will see something quite interesting if you look.

You have an elevator mechanic with a computer-driven elevator, which temporarily mis-contacts each time it passes the third floor, but the computer doesn’t shut it down, until the number of mis-contacts hits an arbitrary number programmed in the computer, triggering the buffer of buffers, and shutting it down. As a mechanic it helps to understand the program logic. One mechanic will replace the most pitted contacts and reboot the elevator. Another will replace all the contacts (accountants calculate failure after warrantee for a reason). And another will replace all floor contacts, charge for one at the time, and then charge for each of the others over time, with overhead, without ever going back on-site.

The corporation loves mechanic #3, likes mechanic #1, and hates mechanic #2. If you think about it, #3 & #1 net out to #2, if you do #2, tell the corporation #1, do #3 with the paperwork thereafter, and the customer is smart enough to appreciate the effort, and, unless you tell the call center, no one except you really understands the elevator when one-way communication turns into two-way communication, and it always does.

Start by replacing the production farmers with family farmers. Develop seed to fit. Build a farmer’s market for all local necessities – fruit, vegetables, milk, meat, plants, furniture, and tools. You’ll need a regional appliance and implement manufacturer. It doesn’t matter what currency you use, so long as you set prices locally to meet community objectives, and trade surplus profitably. Basic rent may be no more than 40X entry-level wage/hr.

The big city/state/nation system is stealing from the countryside. Don’t let them steal from you, especially your talented children. You have the Internet; you do not need their education system. The whole point of Wal-Mart is to set price and control distribution. Once you control distribution, you control the customer base, which is the point of the Navy (oil), and what they tried to do with the Internet. If local prices are set correctly, with local energy, balancing the demographic distribution, no entitlement system is required.

The universe oscillates between 0 and 1 instantaneously, from its perspective. The processing by delay mechanisms within the interval, like your brain, creates time. If you look down through the dc circles the sheeple are travelling around, one ultimately looks like a point, because you can see no further, but an ameba on that point looks down upon more circles, until it sees a point.

To “beat” the system, you jump two circles (high energy state) above the corporate multiplexer controlling the “seen” economy, to create the data and equations that the looking glass will see in the future. That’s what communities do, in a functional, symbiotic economy. To do that, you have to load the spring, compress the circles, by skipping all the misdirection in the scarcity system, while delivering the outcome it expects, with minimal effort.

Think about it from the perspective of a machine operator, who only acts to interrupt the machine when it errs. If you are expecting the error correctly, you have all kinds of time to acquire tomorrow’s tools today, in a positive feedback cycle that balances the corporate cycle, and you are in a position to regulate the black hole, to create a sun or a gamma burst.

The universe is a clock. Your multiplexer adaptation is a light-penetrating mirror, acting as a relay.

Instead of leading the corporations, small business has been following, placing the cart before the horse, for so long that the behavior is normalized. The corporations could care less what products they are peddling. The ad man is responsible for giving the customer religion, and the accountant is responsible for defining profit. The corporation only cares about maximizing the amount of wealth it handles.

Less than half the people in this country work, and nearly all of what they do is corporate misdirection, make-work. They got their low prices, and it cost them their entire entitlement system. Nothing is free. Welcome to Wally World. Have a nice day. Critters.

You need steering and torque.

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