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How A Handful Of Unsupervised MIT Economists Run The World

Tyler Durden's picture




 

Ever get the feeling that the entire global economy is one big experiment conducted by several former Keynesian economists from MIT with a bent for central planning, who sit down in conspiratorial dark rooms in tiny Swiss cities and bet it all on green until they double down so much nobody even pays attention to the game? No? You should. Jon Hilsenrath, of all people, explains why.

From the WSJ:

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

 

The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world's biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world's economic output.

 

Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.

 

Their monetary strategy isn't found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.

 

"Will history decide they did too little or too much? We don't know because it is still a work in progress," said Kenneth Rogoff, an economics professor at Harvard and co-author of a book, "This Time Is Different," examining financial crises over eight centuries. "They are taking risks because it is an experimental strategy."

 

Three of the world's most powerful central bankers launched their careers in a building known as "E52," home to the MIT economics department. Fed Chairman Ben Bernanke and ECB President Mario Draghi earned their Ph.D.s there in the late 1970s. Bank of England Governor Mervyn King taught briefly there in the 1980s, sharing an office with Mr. Bernanke.

 

Many economists emerged from MIT with a belief that government could help to smooth out economic downturns. Central banks play a particularly important role in this view, not only by setting interest rates but also by influencing public expectations through carefully worded statements.

 

While at MIT, the central bankers dreamed up mathematical models and discussed their ideas in seminar rooms and at cheap food joints in a rundown Boston-area neighborhood on the Charles River.

 

Over Sunday dinners in Basel, which often stretch to three hours, they now talk of pressing, real-world problems with authority. The meals are part of two-day meetings held six times a year at the BIS. Dinner guests include leaders of the Fed, ECB, Bank of England and Bank of Japan, as well as central bankers from India, China, Mexico, Brazil and a few other countries.

The same BIS, incidentally, which is an employer of "The People Bringing You Currency Manipulation On A Daily Basis" whom we described in April.

The role of the Bank for International Settlements has broadened since it was formed in 1930 to handle reparation payments imposed on Germany after World War I. In the 1970s, it became the center of discussions on bank capital rules. In the 1990s, it became the meeting place for central bankers to talk about the global economy.

It is also the place where the coordination of all the real trading these days: that conducted by central planners of course. Most importantly, it is responsible for perpetuating the status quo.

As for our unsung MIT heroes...

The 18-member group, formally known as the Economic Consultative Committee, has only once issued a public statement: a two-line missive in September, promising to look for solutions in interbank lending markets, responding to allegations that some private banks had conspired to manipulate the Libor interest rate.

 

On Mondays after the dinner, the bankers join a larger group of central bankers at a large round table on a lower floor of the BIS building, which is shaped like a rook chess piece. Staff members sit nearby at desks decorated in white leather.

...

The Bank of England's Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the "Bird's Nest" stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.

 

"It is a way in which people can talk completely privately," Mr. King said in an interview. "It is a big advantage if you have some feel for how central banks think about questions, what they're likely to do in the future if certain events were to occur."

 

Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.

The punchline: a handful of people from MIT, deeply steeped in economic theory (not practice), the same people whose actions incidentally were responsible for the first great financial crisis, and who yield more power than any potenate in the history of the world - people who, as the ECB showed in the case of Berlusconi, can take down presidents and PMs with the flick of a switch, meet in private. No transcripts or buttlers are allowed.

In other words, they are accountable to absolutely nobody.

Which is to be expected: after all they are conducting the greatest experiment in monetary, geopolitical and social history. If they fail... when they fail, everyone loses.

 

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Wed, 12/12/2012 - 10:15 | 3055440 GetZeeGold
GetZeeGold's picture

 

 

MIT......I thought those guys mainly did physics and engineering?

 

Sure you're not talking about MIB?

Wed, 12/12/2012 - 10:26 | 3055519 eclectic syncretist
eclectic syncretist's picture

And if MIT Romney had won the election..........

Wed, 12/12/2012 - 10:28 | 3055529 AlaricBalth
AlaricBalth's picture

During the glory days of the former Soviet Union, where the military would hold a parade each year to celebrate May Day, leading the procession of tanks, missiles, and bazooka-bearing infantry marching proudly toward Red Square was a row of goose-stepping economists. One spectator turned to his companion and asked, “Comrade, why are there economists marching in this military parade?”, to which his friend replied, “Comrade, do you have any idea how much damage they can do?"

Wed, 12/12/2012 - 10:36 | 3055576 Enslavethechild...
EnslavethechildrenforBen's picture

Your children they are belong to us.

Wed, 12/12/2012 - 10:49 | 3055653 trav777
trav777's picture

There are some other connections between most of these bankers and economists that run a little deeper than MIT

Wed, 12/12/2012 - 10:53 | 3055669 mess nonster
mess nonster's picture

The money and the juice go together.

Wed, 12/12/2012 - 12:26 | 3056066 NotApplicable
NotApplicable's picture

Question is, why is HilsenRat stirring this particular pot now? Smoke or mirror?

It's almost as if someone is seriously upping the level of the age-old game of "Divide & Conquer." Maybe in an effort to remove the "fiscal" part of the "fiscal cliff" equation?

Interesting times, indeed...

Wed, 12/12/2012 - 14:10 | 3056548 caconhma
caconhma's picture

"A Handful Of Unsupervised MIT Economists Run The World"

This statement is utterly incorrect and deliberately misleading. All these people work for and are controlled by the Zionist Banking Mafia.

Wed, 12/12/2012 - 18:59 | 3057658 john39
john39's picture

so true... nothing academic about this... organized crime on a scale that few can comprehend.

Wed, 12/12/2012 - 19:09 | 3057672 Zer0head
Zer0head's picture

as a service to ZH readers this link should get you to the full article

http://www.google.com/search?hl=en&q=site%3Awsj.com++++%22Every+two+mont...

Wed, 12/12/2012 - 20:01 | 3057789 Pinto Currency
Pinto Currency's picture

 

 

"Unsupervised" ??

What exactly is the coordinating role of the BIS?

Wed, 12/12/2012 - 21:28 | 3058011 macholatte
macholatte's picture

 

 

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

 

Who pays for the dinner, lodging, transportation and hookers?

And how many "staff"?  Are we talking a half dozen guys or a hundred?

 

Just curious.

 

 

Wed, 12/12/2012 - 23:01 | 3058225 Michaelwiseguy
Michaelwiseguy's picture


Ho, Ho, Ho! 9/11 Was An Inside Job!

Seasons greeting from your old friend Santa! My, my, Christmas is just two short weeks away, and everyone here at the North Pole can't wait to deliver presents to all you nice boys and girls this year. Yes, Jolly ol' St. Nicholas hopes you're all being as good as can be!

But today, Santa would like to tell you all about something very naughty, something very, very naughty indeed. Dear children, have you not heard? Why, 9/11 was an inside job! Oh, ho, ho, my, yes it was!

I mean, look at the facts, boys and girls! We already know the Bush administration was itching to go to war in Iraq, now, don't we? Yes, indeed we do, my darling ones! The Downing Street memo proves that beyond a shadow of a doubt. Then you look at the Presidential Daily Briefing of Aug. 6, 2001, the one headlined "Bin Laden Determined to Strike in U.S." Ignored! Why, children, they threw that briefing aside like used wrapping paper on Christmas morning, didn't they?

And remember, sweet little ones, Bin Laden never claimed responsibility for the attacks until 2004. Do you know how many years that is, boys and girls? Something was up the government's sleeve, and I'll let you in on a little secret: It wasn't sugar plums, oh, no! No, it was the ties between the bin Laden and Bush families. They've been under the mistletoe for decades, if you catch your old pal Kris Kringle's meaning! I've checked my list twice, and it seems Arbusto Energy, a Bush business, had financial connections to Salem bin Laden, half-brother of Osama. The CIA actually helped create and fund al-Qaeda right around the time Bush Senior was the agency’s director—ho, ho, ho, ol' H.W. stuffed their pockets as fat as a Christmas goose!

'''''''

Perhaps this Christmas, Santa will bring some of you very well-behaved—and discreet—young children some nice, shiny new computers to play with, so you can go to 911truth.org, watch "Loose Change" on YouTube, and see for yourselves. Because if you ask Santa, the truth needs to come out in order to properly honor the memory of the victims and awaken a duped populace, slumbering away in their cozy beds, living in dreamland. We can close our eyes and drink the government eggnog, or we can raise our voices and demand to know what really happened. Isn't that right, boys and girls?

Well, I've still got a lot of toys to build before Christmas Eve, my little ones, but I'll be visiting you all very soon—ho, ho, ho, that is if I'm not jailed as an enemy combatant for asking simple questions!

Because that's what they fucking do, you know.

http://www.theonion.com/articles/ho-ho-ho-911-was-an-inside-job,30705/

LEAKED VIDEO OF CRUISE MISSILE HITTING PENTAGON ON 911 RARE FOOTAGE

http://www.republicbroadcasting.org/index.php?cmd=news.article&articleID=4602

Wed, 12/12/2012 - 19:07 | 3057670 Zer0head
Zer0head's picture

-

Wed, 12/12/2012 - 10:54 | 3055678 Antifaschistische
Antifaschistische's picture

you got it Trav...my thoughts exactly

Wed, 12/12/2012 - 11:03 | 3055720 clymer
clymer's picture

Oh Unwashedmass, you must comment on this article

Wed, 12/12/2012 - 11:18 | 3055785 Texas Ginslinger
Texas Ginslinger's picture

So, it's Mit's fault...???

Wed, 12/12/2012 - 11:29 | 3055836 Dalago
Dalago's picture

So THESE are the terrorists!  Got it!

Wed, 12/12/2012 - 11:52 | 3055927 TruthInSunshine
TruthInSunshine's picture

 "MIT......I thought those guys mainly did physics and engineering?"

 

MIT is also heavily involved in the developing new, innovative and efficient ways-to-kill-human-beings-industry. IOW, Big Defense has co-opted a huge portion of their resources.

Wed, 12/12/2012 - 12:51 | 3056177 Kobe Beef
Kobe Beef's picture

How charming. I wonder if one could ignite an intramural scrum, split the ranks, pit Big Defense against Big Banking somehow.

For the record, I never signed any "Informed Consent" Papers to be a Test Subject in some massive MIT Socio-Economic Experiment. Surely its just an ethical oversight.

Wed, 12/12/2012 - 13:05 | 3056223 formadesika3
formadesika3's picture

Exactly. How can they be taking risks when it's OPM they're risking?

Wed, 12/12/2012 - 13:08 | 3056238 LawsofPhysics
LawsofPhysics's picture

When there are no real consequences for an individual's (or club's) bad behavior that is essentially a form of absolute power.  Make no mistake, absolute power corrupts, absolutely.    History shows exactly how this power will get rebalanced, hedge accordingly.

Wed, 12/12/2012 - 19:32 | 3057723 Michaelwiseguy
Michaelwiseguy's picture
United Nations tells Israel to let in nuclear inspectors

The resolution, approved by a vote of 174-6 with 6 abstentions, calls on Israel to join the Nuclear Nonproliferation Treaty “without further delay” and open its nuclear facilities to inspection by the International Atomic Energy Agency. Those voting “no” were Israel, the U.S., Canada, Marshall Islands, Micronesia and Palau.

http://english.alarabiya.net/articles/2012/12/04/253250.html

Wed, 12/12/2012 - 20:13 | 3057836 Doomer
Doomer's picture

Makes one wonder if being an amoral psychopath is a requirement to get in.

Wed, 12/12/2012 - 12:30 | 3056092 michael_engineer
michael_engineer's picture

I just noticed this. When did trav get back?

Wed, 12/12/2012 - 16:10 | 3057057 Cathartes Aura
Cathartes Aura's picture

same time RoboT did - interestingly enough. . .

Wed, 12/12/2012 - 19:25 | 3057708 candyman
candyman's picture

reunion, it only happens once or twice a year.

Wed, 12/12/2012 - 20:09 | 3057825 Cathartes Aura
Cathartes Aura's picture

y'gotta laugh tho'

I mean, do they have ZH-Batphones?

"dudes, we needs ya!!! get back in here & stir some shit!!"

it's like their accounts. . .are. . . yeah.

Wed, 12/12/2012 - 21:19 | 3057998 tbone654
tbone654's picture

same dude...  two e-mail accounts...  two zh accounts... easy, see it all the time...  ??

Wed, 12/12/2012 - 21:35 | 3058038 Cathartes Aura
Cathartes Aura's picture

but not two beloved old-timer Hedg'rs???

blasphemy!

 

((mind goes to just who might be the account-holder, such timely resurrections))

Wed, 12/12/2012 - 13:18 | 3056284 AnAnonymous
AnAnonymous's picture

There are some other connections between most of these bankers and economists that run a little deeper than MIT
_______________

All of them are indo-europeans? All of them are 'americans'?

Thu, 12/13/2012 - 06:47 | 3058693 Poor Grogman
Poor Grogman's picture

Nitwit.

Wed, 12/12/2012 - 11:57 | 3055951 Stock Tips Inve...
Stock Tips Investment's picture

I think one of the serious problems of the world, has to do with this topic. I do not see much counterpart among economists and analysts. Almost all the monetary authorities in the world, given as an unquestionable truth, the role of governments in resolving the crisis. Everyone wants more government spending. First, as far as the possibility of debt allows. And then, as far as the tax increase to support it. I do not see an active opposition against this nonsense. Consequently, problems continue.

Wed, 12/12/2012 - 12:18 | 3056032 NoDebt
NoDebt's picture

Agreed- the lack of anyone pushing back is perhaps one of the most troubling aspects of the current situation.  Anyone CREDIBLE, I mean, not us ZH monkeys.

The only thing that I can possibly imagine WORSE than the failure of this experiment would be it's SUCCESS.  Can you imagine the colossal power consolidation that would happen amongst those ranks if they DO save the world?  Who could ever stand against them?  That would be a bad, bad situation.

Wed, 12/12/2012 - 12:27 | 3056071 derek_vineyard
derek_vineyard's picture

guess everyone either (A) dropped their pants and bent over or (B) bought guns and metals

Wed, 12/12/2012 - 12:26 | 3056072 derek_vineyard
derek_vineyard's picture

guess everyone either (A) dropped their pants and bent over or (B) bought guns and metals

Wed, 12/12/2012 - 12:29 | 3056073 derek_vineyard
derek_vineyard's picture

.

Wed, 12/12/2012 - 19:17 | 3057690 three chord sloth
three chord sloth's picture

No one "credible" CAN push back... by definition. It's circular... belief in the system is a requirement for credibility, and the system doesn't acknowledge anyone not deemed credible.

Wed, 12/12/2012 - 10:59 | 3055701 jayman21
jayman21's picture

The down arrow trolling is getting out of control.  Who would junk such a clever comment?

 

If you are an economist down arrowing, trying reading the blackswan and you might get the joke.  Asshole

Wed, 12/12/2012 - 10:37 | 3055584 indygo55
indygo55's picture

" If they fail... when they fail, everyone loses. "

Do you mean everyone EXCEPT them?

 

Wed, 12/12/2012 - 11:05 | 3055727 DaveyJones
DaveyJones's picture

thank God none of them are arrogant

Wed, 12/12/2012 - 11:45 | 3055905 DeadFred
DeadFred's picture

Don't forget Geithner. Anyone who has worn a MIT T-shirt and looked in the mirror knows that it spells 'TIM' backwards.

Wed, 12/12/2012 - 10:47 | 3055632 MassDecep
MassDecep's picture

Well, they have physically engineered the biggest collapse our world is about to see!!!!

Wed, 12/12/2012 - 10:58 | 3055688 NewAmericaNow
NewAmericaNow's picture

MIT, You will never find a more wretched hive of scum and villainy

Wed, 12/12/2012 - 11:09 | 3055741 DaveyJones
DaveyJones's picture

They're really mitt. engineers since most folks wear gloves when they subject others to that procedure.

Wed, 12/12/2012 - 13:14 | 3056255 The Shootist
The Shootist's picture

MIT physicists started moving away from human control notions after discovering the nature of quantam mechanics around the forties. Economists at this time moved away from black and white economic principles and embraced false scientific formulas.

Wed, 12/12/2012 - 11:07 | 3055735 Rathmullan
Rathmullan's picture

MIT and Harvard Economists are the "intellectual puppets" of an utterly corrupt, crony capitalist "system".

Wed, 12/12/2012 - 15:58 | 3056984 earleflorida
earleflorida's picture

wish it was that simple...

http://www.thezog.wordpress.com/who-controls-the-group-of-thirty/

these people wallow in a primordial cesspool of incestual gratification...

the one thing we've got going for us pleb's, [speak for yourself [?]... sudden tingling in my typing finger?] is that they'll all eventually, fuck each other too insanity!

Wed, 12/12/2012 - 19:37 | 3057743 Spinelli
Spinelli's picture

That site says global warming is a scam and that humans are not short cicutting a natural process and causing intrisic changes to the climate...

I loled, an entire site... despite how accurate and well researched down the drain.. *waves good-bye*

Wed, 12/12/2012 - 21:46 | 3058060 earleflorida
earleflorida's picture

"Carbon Trading '2012' & Global Warming" 

big, big bucks, and global regulatory capture, except this time... it's the NWO's TBTF's running the show!

http://www.muckety.com/carbon-trading/5073762.muckety

enjoy

have ya seen gore lately?

Wed, 12/12/2012 - 23:49 | 3058344 Michaelwiseguy
Michaelwiseguy's picture

So, these are some of the people on the hit list?

Wed, 12/12/2012 - 12:52 | 3056178 Silver Bug
Silver Bug's picture

A small handful of global "elites" (I use that term loosely) most certainly do direct the flow of the world. Just look at how many goldman sachs guys are now central banksters!

 

http://ericsprott.blogspot.ca/

Wed, 12/12/2012 - 20:53 | 3057934 GOSPLAN HERO
GOSPLAN HERO's picture

You meant MDB.

Wed, 12/12/2012 - 22:08 | 3058121 Freddie
Freddie's picture

Paul Krugman is a (faux) "economist" and a total f***tard lefty like this lot of vermin.   The Goldman men doing Beelzebub's work.

 

Thu, 12/13/2012 - 00:08 | 3058378 lasvegaspersona
lasvegaspersona's picture

hehe...he said BUTTler

Wed, 12/12/2012 - 10:09 | 3055442 mjorden
mjorden's picture

Either them or Jesus ... 

Wed, 12/12/2012 - 10:12 | 3055463 Flakmeister
Flakmeister's picture

Jesus is their gardener....

Either them or the "Boys from Chicago"...

Wed, 12/12/2012 - 10:31 | 3055551 Chief KnocAHoma
Chief KnocAHoma's picture

No... remember that Jesus stood up to the bankers of his day. He threw them out of the Temple, and was hanging on a cross three days later. Lesson learned.... don't fuck with the money changers.

Wed, 12/12/2012 - 10:37 | 3055583 Element
Element's picture

Good, because there's a few sionists in that lot.

Wed, 12/12/2012 - 12:33 | 3056096 Flakmeister
Flakmeister's picture

Since the z and s are next to each other, we will let this one zlide...

Wed, 12/12/2012 - 10:54 | 3055668 MassDecep
MassDecep's picture

I assume it is your assumption that man is God. That, my friends, is our only problem.

 

Jesus died, to pay for our sins. Gods precious gift to us, was his only son. If you think that money changers had any power in crucifying Jesus, you are dead, blinded .....and wrong.

 

Wed, 12/12/2012 - 11:27 | 3055830 Chief KnocAHoma
Chief KnocAHoma's picture

So I guess that mob calling out for the crusifix outside of Pontius Pilat's place had nothing to do with it. 

A believer can use common sense. Those two traits aren't exclusive.

Wed, 12/12/2012 - 14:15 | 3056572 takinthehighway
takinthehighway's picture

That mob was incited by the Hebrew religious leaders to call for Jesus' death. Since the Hebraic law did not allow for the death penalty in this case, the leaders went to the Romans and charged Jesus with setting Himself up as king in direct opposition to Caesar. Pilate was pressured to do this with the threat of the religious leaders going to Caesar and informing him that Pilate was aligning himself with a king other than Caesar. Pilate would lose his position if not his life. Even though he knew that the charges were false, Pilate was not about to allow a localised religious dispute to destroy him. Expediency trumps right - same as it ever was.

Wed, 12/12/2012 - 23:48 | 3058338 Dave Thomas
Dave Thomas's picture

This sounds almost ponigent to todays world. My how time works.

Wed, 12/12/2012 - 15:48 | 3056950 MassDecep
MassDecep's picture

Jhn 19:10 KJV - Then saith Pilate unto him, Speakest thou not unto me? knowest thou not that I have power to crucify thee, and have power to release thee?
Jhn 19:11 KJV - Jesus answered, Thou couldest have no power [at all] against me, except it were given thee from above: therefore he that delivered me unto thee hath the greater sin.

So, it was all in the plan?

Wed, 12/12/2012 - 19:48 | 3057765 Spinelli
Spinelli's picture

Uhm.. I highly doubt jesus was thinking about the sins of people thousands of years after his time.. He was more likly rebelling against the conditions of his time.

And as for God, that word isnt even defined, keep it to yourself and dont make erronous statments kktybai :)

You know a site is good when stupid comments like yours get double the downvotes that up ^.^

Wed, 12/12/2012 - 21:31 | 3058017 tbone654
tbone654's picture

but history repeats itself over and over...  the nature of feudalism...  The only economic system that always, always works...  an endless cycle...

someone conquer's another... conqueror either kills everyone or assimilates them into their own... the society gets fat and sassy and becomes an easy target to conquer... insiders seek the help of outsiders...  wash, rinse, repeat...

It's just history...

Wed, 12/12/2012 - 21:02 | 3057953 Schmuck Raker
Schmuck Raker's picture

That's right. The Jews didn't kill Jesus, God killed Jesus.

Not a lot of people realize that.

Wed, 12/12/2012 - 12:51 | 3055752 DaveyJones
DaveyJones's picture

that's because it's easier to resurrect a human than a currency

Bless me Banker for I have sinned. It's been three months since I last refinanced my mortgage.

Wed, 12/12/2012 - 10:42 | 3055611 Oquities
Oquities's picture

yer wrong tree barking - YAHWEH is their dude.

Wed, 12/12/2012 - 19:05 | 3057663 john39
john39's picture

tetragrammaton.... god of zionism... god of freemasonry...   a liar from the beginning.

Wed, 12/12/2012 - 10:10 | 3055448 djsmps
djsmps's picture

Do all their voices quiver when they talk?

Wed, 12/12/2012 - 10:29 | 3055535 CPL
CPL's picture

I wouldn't trust anythem to engineer anything but answer a phone, write a ticket and pass it on to someone that knows how to fix it.

 

Being senior doesn't necessarily mean seniority in a trade.  Besides...Economists as Engineers.  No.  They get their iron ring and learn a useful trade first.  Until then they are just gasbags with money and a project idea.

Wed, 12/12/2012 - 10:52 | 3055622 AlaricBalth
AlaricBalth's picture

Modern economists suffer from an affliction call "physics envy". What their over-inflated egos will not allow them to understand is, unlike physics, in which pure mathematical logic can often yield useful insights and intuition about physical phenomena,  a purely deductive approach to economic analysis may not always be appropriate and can sometimes be destructive. 

Paul Samuelson admonished against theoretical economics when he wrote, "Only the smallest fraction of economic writings, theoretical and applied, has been concerned with the derivation of operationally meaningful theorems. In part at least this has been the result of the bad methodological preconceptions that economic laws deduced from a priori assumptions possessed rigor and validity independently of any empirical human behavior. But only a very few economists have gone so far as this. The majority would have been glad to enunciate meaningful theorems if any had occurred to them. In fact, the literature abounds with false generalization.

We do not have to dig deep to find examples. Literally hundreds of learned papers have been written on the subject of utility. Take a little bad psychology, add a dash of bad philosophy and ethics, and liberal quantities of bad logic, and any economist can prove that the demand curve for a commodity is negatively inclined."

Wed, 12/12/2012 - 11:32 | 3055797 disabledvet
disabledvet's picture

The irony of course is that if you have a gold standard the "money numbers" can actually start to make sense..at least the "money at risk" (backed by gold at a set price) numbers. Now you have to be a genius just to SAY the number.

Wed, 12/12/2012 - 14:30 | 3056622 koncaswatch
koncaswatch's picture

AB thanks for the Samuelson quote; a Nobel Economist that understands the failings of his feild of study.

Wed, 12/12/2012 - 23:00 | 3058237 TruthInSunshine
TruthInSunshine's picture

I regret that I only have but one up arrow to give to Alaric.

Economics, the truly dismal "science" perpetuating a dismal field of dismal prognosticators with a success rate in economic tinkering and forecasting so low that it makes Wile E. Coyote look like an absolute success & genius by contrast.

Wed, 12/12/2012 - 10:11 | 3055450 ihedgemyhedges
ihedgemyhedges's picture

Accountable to none, responsible for all.  How do I get one of those gigs?

Wed, 12/12/2012 - 10:10 | 3055451 hero HNL
hero HNL's picture

I went to mit too....not in econ though.

Wed, 12/12/2012 - 10:23 | 3055469 GetZeeGold
GetZeeGold's picture

 

 

Money well spent I'm guessing.

Wed, 12/12/2012 - 10:34 | 3055565 hero HNL
hero HNL's picture

Nope.....on scholarship. But I didn't like the school so much.

Wed, 12/12/2012 - 10:42 | 3055590 GetZeeGold
GetZeeGold's picture

 

 

That's why I went to a coed school.....in Florida. I suppose I learned something. Hell if I can remember what.

Wed, 12/12/2012 - 10:11 | 3055454 hero HNL
hero HNL's picture

I was in course22.

Wed, 12/12/2012 - 10:13 | 3055456 LawsofPhysics
LawsofPhysics's picture

 

It's a club, and you are not in it.

I maintain my original hypothesis;  Once all the real wealth and physical assets have been claimed by the TBTF conglomerates around the world and the real owners have their tribes in order.  A universal police state society, much like the current chinese state, will be imposed on the earth.  The real power brokers in China and America have been on the same page for quite a while and have learned many things from each other.  Regarding all the paper promises and debt, all the central banks (who really serve as the control points for the owners) will get together and re-negotciate everything, effectively evaporating derivatives and any debt or risk that they had on their books.  You will still be reasponsible for your debt of course.  The good news is there will be numerous dead-end, debt-slave, government/coroporate-sponsored positions for you to work the rest of your life at.  The true power brokers know exactly what they can get away with from the experiences of people trapped in the toy/tech factories of china and the prisons of America.

Personally, I am in capital preservation mode, not hiring, not firing, trying to produce the minimum product and save on the maintenance costs for my equipment so we can simply stay in business.  It takes real commodities and energy to keep this equipment running.  Tell me Mr. Bernanke, what is inflation in these areas dumbass?

 

Wed, 12/12/2012 - 10:17 | 3055485 EscapeKey
EscapeKey's picture

Inflation? Clearly, your problem is that you don't buy enough iPads.

Wed, 12/12/2012 - 10:26 | 3055524 eclectic syncretist
eclectic syncretist's picture

It's a good day to buy silver.

Wed, 12/12/2012 - 10:34 | 3055559 Pseudo Anonym
Pseudo Anonym's picture

also, dont forget that even in this scenario:

... the real owners have their tribes in order.

a supreme court will be needed to shower everybody with their tribal justice

http://vigilantcitizen.com/sinistersites/sinister-sites-israel-supreme-c...

http://vigilantcitizen.com/category/sinistersites/

Wed, 12/12/2012 - 10:34 | 3055564 Tao 4 the Show
Tao 4 the Show's picture

I see you are re-posting this so guess you either want feedback or just to distribute the idea.

If one creates mental vectors for the many trends that are gaining momentum (and imagines them extending forward in time), your conclusion is reasonable. The problem I see is that the system loses stability at every step along this path. I won't go into the reasons here, but anyone studying complex systems would know why. Even Taleb, the "Black Swan" guy talks about this in the context of markets and he is not really the brightest bulb around (though a good salesman).

Certainly absolute control is the dream goal for many types of pathology. It never works for long though can cause much pain in the process. The former East Germany is a good example.

Wed, 12/12/2012 - 10:41 | 3055589 LawsofPhysics
LawsofPhysics's picture

Just stating my position.  One that I am guessing other small business owners are also familiar with.  That, and desparately looking for more suggestions on capital preservation.

 

Wed, 12/12/2012 - 10:40 | 3055603 Tao 4 the Show
Tao 4 the Show's picture

Just responding to your idea by saying that I don't think global control will work.

Regarding capital preservation, I am faced with the same thing and agree with your approach. Low profile is the key.

Wed, 12/12/2012 - 10:52 | 3055657 LawsofPhysics
LawsofPhysics's picture

Despite their true lack of compassion or common sense, these are smart people.  They don't talk about what they are really doing until it has been implemented.  So if the issue really is complexity, the obvious solution is to eliminate that complexity where they can.  From and economic/monetary perspective that would mean that all sovereign entities and social differences/individualism must be eliminated.  This is exactly what I see being attempted in the eurozone.  Remember, if you are a tenant of the Coroporation of the United States, the United Nations issues your birth certificate already.  Long term, I agree with you, but people like this always "push the envelope" as it were until things outright collapse in order to rebalance the real environmental and resources costs.  WWII is a perfect example regarding how the "rebalancing occuring.  There were maybe a few billion on the planet then, makes you wonder how that "rebalancing" will go this time around.

Wed, 12/12/2012 - 11:00 | 3055710 Tao 4 the Show
Tao 4 the Show's picture

I didn't clarify my word usage. I was using "complexity" in the "complex systems" sense. That type of complexity can be used to describe free markets, traffic jams, ant colonies, and a bunch of other phenomena. Complex in the sense of the tax code is something completely different and philosophically moving in the opposite direction. Taleb wrote an article or two about what happens when you begin to centrally control markets. They go from being flexible and self-correcting to being fragile and at risk of sudden and enormous crashes.

My point was that in reducing freedom in markets, societies, etc., you reduce their functionality. They may try harder and harder to control everything, but that will reduce the complexity and richness of the system, eventually crashing it altogether. Control doesn't work in organic systems. Ever seen a marriage where one partner tried keeping the other under control?

Wed, 12/12/2012 - 11:05 | 3055723 LawsofPhysics
LawsofPhysics's picture

The only complexity I see that matters is the flow of energy.  It drives all the biological cycles that must be maintained in order to sustain life, in it's current form anyway.  Nothing else really matters. Interupt any one of a number of essential biological cycles and the ant colony dies, no exceptions.  It's the secret to Nature's success.

Wed, 12/12/2012 - 11:12 | 3055753 Tao 4 the Show
Tao 4 the Show's picture

Excellent point about energy - unquestionably the first requirement. After that is still interesting though.

Why does a hurricane form? There is an energy difference between earth and sky that tends towards equilibrium. As it turns out, the vortices formed in a hurricane are more efficient at energy transfer than the situation where the air is still and merely conducts or radiates the energy away. Complexity forms in response to conditions involved in energy flows. Who says the Second Law is no fun!

Wed, 12/12/2012 - 11:30 | 3055839 LawsofPhysics
LawsofPhysics's picture

The hurricane still consumes a lot of thermal energy, it had to go somewhere after all, and the mess left behind a hurricane's path gives that entropy right back several fold.

Wed, 12/12/2012 - 11:38 | 3055874 Tao 4 the Show
Tao 4 the Show's picture

Yep, entropy happens. Maximum entropy is when thermal equilibrium is reached. This happens in any case. It's just more interesting when the process of moving from lower to higher entropy involves formation of a complex system like a hurricane rather than just something boring like thermal conduction. No energy consumed... just movement from low entropy which can perform work and high entropy or theremal equilibrium which can perform no work.

Wed, 12/12/2012 - 11:53 | 3055929 LawsofPhysics
LawsofPhysics's picture

" It's just more interesting when the process of moving from lower to higher entropy"

-------------------------------------------

Gee, you mean like a human cell.  The world has a lot more human cells then it did 100 years ago, now about those landfills...  fish stocks... and arable land... etc.

By the way, I don't necessarily see this as an improvement.  the capital and resource mis-allocation and mal-investment continues.

Wed, 12/12/2012 - 12:05 | 3055981 Tao 4 the Show
Tao 4 the Show's picture

Interesting point. Yes, I find cells fascinating, but too much human impact is reducing complexity on the planet. And no argument about poor resource allocation. Humans, in the mass, are not too bright.

Fri, 12/14/2012 - 18:48 | 3064747 Aurora Ex Machina
Aurora Ex Machina's picture

Both of you are so close, I can taste it.

1) If you want to look into Complexity Economics, it exists.

2) An autopoietic machine is a machine organized (defined as a unity) as a network of processes of production (transformation and destruction) of components which: (i) through their interactions and transformations continuously regenerate and realize the network of processes (relations) that produced them; and (ii) constitute it (the machine) as a concrete unity in space in which they (the components) exist by specifying the topological domain of its realization as such a network. [...] the space defined by an autopoietic system is self-contained and cannot be described by using dimensions that define another space. When we refer to our interactions with a concrete autopoietic system, however, we project this system on the space of our manipulations and make a description of this projection [wiki]. ~ Note: We are all autopoietic systems, all living things are.

3) GREP me on Body Horror. We are merely boundaries, with a multitude of fauna inside us. Careful what we share, from STD to MRSA to Parasites. Scary, eh? But symbiotes exist as well. The female is often hated because her boundaries are more porous than the males, both physically (oh, the moon, and birth) and metaphorically ("weak" empathy... oh the irony). Or we could study the genealogy of viruses, and their effects. 

4) Could there be two Higg Bosons? 

5) You're correct: if there is any rule to Theology, it is merely "Dei plena sunt omnia": we find it ironic that the most 'Holy' of the Abrahamic Religions ignore this for the sin of merely reproducing themselves. See it in a million WalMarts or see it in a million Temples all designed the same, while slashing / burning verdant forests and local cultures with a repetition of the word "YAWEH / GOD", making sure all the thoughts & actions are the same. Reducing Complexity is to reduce God; mindless self-replication is the death of a species, and of the mind ~ thus a curse.

6) You're both so close. Your mind has a macro- and micro- scale that are almost mirror images of each other in terms of how far you can see. Now, is this due to Science, or due to your perceptual boundaries? The second is closer to the truth, and yet: you're all still stuck viewing Space/Time as a 2D plane, and not exploring the 3rd [4th we can wait for] in terms of networks. Computers are only just now allowing you to do it, and infographics are delightful! How many minds can understand fractals yet, and yet still can't understand ecology? Watching humanity is like watching a drug addict destroy her loved ones and her health through blindness.

 

Ciao or Hello? (In lieu of "Performance").

Wed, 12/12/2012 - 12:22 | 3056053 Colonial Intent
Colonial Intent's picture

Problem, reaction, solution.

Create a percieved problem.

Manage the real reaction.

Impose your pre-planned solution.

Simples.

Wed, 12/12/2012 - 10:50 | 3055664 crusty curmudgeon
crusty curmudgeon's picture

"Low profile is the key."

Too late for you...you posted here.

Wed, 12/12/2012 - 10:53 | 3055673 LawsofPhysics
LawsofPhysics's picture

Unless you know what servers I am going through and how they are encrypted/protected, I've got some time.

Wed, 12/12/2012 - 12:12 | 3056008 Bollixed
Bollixed's picture

Fuck that, wear it like a badge of honor. You either stand for something or you stand back and take what is given to you. Better to be able to tell your grandchildren your thoughts were fertilizer for the betterment of mankind than that you just sat back and let their futures be taken from them.

Wed, 12/12/2012 - 12:19 | 3056037 LawsofPhysics
LawsofPhysics's picture

You mean something like having your servers also set-up with pound or two of homemade "send you to the moon" fun when they come for them?  Yes, in the meantime, live to fight another day. 

Wed, 12/12/2012 - 12:29 | 3056083 Bollixed
Bollixed's picture

I take it you're using those Claymore 1000 servers with the remote reboot feature...

Wed, 12/12/2012 - 12:01 | 3055967 Pseudo Anonym
Pseudo Anonym's picture

pft,

Too late for you...you posted here.

as if the higher ups cared.  what are we talking here? 60K regulars generating circa million page flips?  total population circa 7B and 0H posters are such a thread to the nwo?  come on,..

Wed, 12/12/2012 - 12:30 | 3056091 centerline
centerline's picture

Whenever I am reading articles on virtually any site, I always scroll down and check the comments.  The tone of the comments has really changed over the last few years.  People are starting to see through the smoke and mirrors a little better.  Starting to focus.

Herein though, there are alot of people posting everywhere.  So many blogs and sites too.  Each with a following.

I agree that the PTB don't care what we talk about.  All they care about is how is respond to real stimulus (and I don't mean cash).

Wed, 12/12/2012 - 13:18 | 3056214 crusty curmudgeon
crusty curmudgeon's picture

I hope you are right...that would be nice if true.  But I think it's entirely inconsistent with all of human history.

You are being spied upon and every email you write is being stored.  Pol Pot rounded up everyone with any education or even those who wore glasses.  Stalin rounded up (at various times in various purges) those who were believed to be intelligent.  To say nothing of those who believe in freedom and properly see the Fed as the enemy of that freedom.

Some of those who favor an economic collapse in order to shift the balance of power are on record as having stated that this process would require them to kill a great deal of those who would resist.  Why would they not look here to add to that list?  Wouldn't you?  How hard is it to simply add the posters of one website to your list of enemies? 

So, if I'm convinced that posting here is putting myself on a list, why do I do it?  Because not saying something is itself taking a stand -- a cowardly stand. 

I don't know if this quote is accurate but it doesn't matter--I like the sentiment: 

The hottest places in hell are reserved for those, who in times of great moral crisis, maintain their neutrality Dante

Wed, 12/12/2012 - 16:30 | 3057135 Cathartes Aura
Cathartes Aura's picture

maybe it's kind of like the birth cert/soc# - everyone has a file created, and all actions tracked via stored pixels.

you may never bump up against anything that outs you. . . but if you do?  the whole backstory is there, ready and waiting. . .

*whistles*  Brazil. . .

Wed, 12/12/2012 - 19:45 | 3057766 tip e. canoe
tip e. canoe's picture

sign here please

Wed, 12/12/2012 - 20:13 | 3057839 Cathartes Aura
Cathartes Aura's picture

". . .and this is my receipt for your receipt."

lost count of how many times I've enjoyed this epic over the years. . .

Wed, 12/12/2012 - 20:17 | 3057849 tip e. canoe
tip e. canoe's picture

pretty amazing how prophetic it actually was.   even the iphone/ipad thingy in the bathtub was right on.

Wed, 12/12/2012 - 21:48 | 3058081 Cathartes Aura
Cathartes Aura's picture

Terry Gilliam has always been tuned in, runs circles around most auteurs, and he just gets better with age.   one can find so many echoes in "reality" from his films.

if you've not seen Tideland, makes some space. . .

Wed, 12/12/2012 - 22:26 | 3058164 centerline
centerline's picture

Will make some space.  That looks really interesting.  Thank you.

Wed, 12/12/2012 - 23:06 | 3058245 TruthInSunshine
TruthInSunshine's picture

 

 

There's a Stellar Wind blowing,
Down the corner of my street
Every night there the headlights are glowing

 

There's a cold war coming,
On the radio I heard
Baby it's a violent world

Wed, 12/12/2012 - 23:07 | 3058261 tip e. canoe
tip e. canoe's picture

tideland and the imaginarium of dr. parnassus would be a nice double feature.

please TAKE generously

 

Thu, 12/13/2012 - 00:06 | 3058375 Yes_Questions
Yes_Questions's picture

 

 

The best posts anywhere.

Thank you for the great films.  Can't believe Tideland never hit my radar..

Thu, 12/13/2012 - 16:03 | 3060581 Cathartes Aura
Cathartes Aura's picture

I follow directors and actors, and when they collide (as they often do), I always take note - a sort of resonance always occurs that would be impossible without all involved. . .

Jeff Bridges, Terry Gilliam, the Coen Brothers, PT Anderson, Gondry/Kaufman, Malkovich, Philip Seymour Hoffman, just a few - but if you look for where any of those have collaborated, genius is fomenting. . .

that re-minds me, I need to watch Synecdoche, New York again soon. . .

long nights, good visuals, much pondering.

Wed, 12/12/2012 - 22:23 | 3058157 centerline
centerline's picture

One of the best movies ever.

Wed, 12/12/2012 - 11:39 | 3055875 disabledvet
disabledvet's picture

As scientists by definition they will view gold as an "anachronism" therefore gold and anything backed by gold (isn't it interesting no one even bothers to back anything with gold? I mean we can't even lie well?) and obviously anything being monetized by the Fed (treasuries, MBS) preserve capital.

Wed, 12/12/2012 - 23:18 | 3058277 tip e. canoe
tip e. canoe's picture

don't ever be fooled, gold is the foundation of their ideology, even (and especially) when they seek to deny it.

the question is why?

Wed, 12/12/2012 - 10:41 | 3055606 Element
Element's picture

Stabileetee = generator of instabileetee

Wed, 12/12/2012 - 10:47 | 3055633 Tao 4 the Show
Tao 4 the Show's picture

Exactly.

I notice even in my own local business affairs that as I reduce costs, my suppliers are struggling. These monetary guys are really causing businesses to pull back, reducing business activity. Conditions are set for the situation to worsen.

Wed, 12/12/2012 - 12:21 | 3056051 Element
Element's picture

Yeah, but people took out loans they knew they'd struggle with due to bring forward consumption too much Tao.

But in the end the drug producer/supplier/trafficer/pusher is what's behind that whole process. 

The FED just happens to be all the above.

Wed, 12/12/2012 - 12:33 | 3056099 centerline
centerline's picture

Same here.  Margins are razor thin and that is with real tight purse strings.  Just keeping the lights on per se.  No wiggle room really.  Won't take much to pressure us into a "downsizing."

Wed, 12/12/2012 - 22:23 | 3058154 Freddie
Freddie's picture

It is ot just the monetary guys but dear mullah.  I know plenty of wealthy people and business owners who would have slowly ramped up with Romney.  Now - they are going to do even less than they did from 2008 to 1012.

Wed, 12/12/2012 - 11:09 | 3055743 A82EBA
A82EBA's picture

Im glad he reposted cause i missed it earlier thanks lop

Wed, 12/12/2012 - 19:35 | 3057715 NidStyles
NidStyles's picture

Not to belittle your point, but these guys work on developing predictive analysis constantly so that they can "control" (They really can't but that is what they tell us) the situation. For the most part you can be relatively accurate if your sampling pool and your variables are broad enough to encompass enough of the field you are trying to predict. This is part of Scalar Theory and why Quantum Theory is so actively applied in their Economic Regiment.

 

Me personally, I think the whole thing is bound to be immoral and abused by a single person or a group of people that realize the amount of control that is potentially there. Even if that control is temporary, which in the real world can mean several decades, the amount of socio-economic damage and wealth loss can be rather massive.

 

We are seeing the results of this social engineering now. It's starting to get out of their control and they do not have any reasonable methodology of explaining it because our understanding of the math in general that they are using is rather primitive, and humans are not ideal operators of probability. That .000001% could actually happen more than once with humans in action. They can't predict for this, because of the way Math itself works.

Wed, 12/12/2012 - 10:49 | 3055647 crusty curmudgeon
crusty curmudgeon's picture

"The good news is there will be numerous dead-end, debt-slave, government/coroporate-sponsored positions for you to work the rest of your life at."

Yes, but the jobs will come at a high price--arresting people knowing they will be turned over to interrogators or, even worse, interrogating.  And the quotas will require a great deal of ingenuity and brutality.  But, of course, that could never happen again.

"Those who cannot remember the past are condemned to repeat it." - George Santayana

Wed, 12/12/2012 - 10:57 | 3055689 DonutBoy
DonutBoy's picture

That has the ring of another crazy Masonic lodge conspiracy theory - unfortunately - its largely true.

Wed, 12/12/2012 - 10:58 | 3055693 kliguy38
kliguy38's picture

I appreciate your hypothesis but unfortunately this was completed by the early 70's. The implementation of the final tuning is virtually ccmplete and only another "dash" of salt needs to be added to the brew. Of course the peeps shall clamor for this "salt" to be added and once that is finished then of course Peace and Tranquility will exist....hehehe. Its a great game and of course all predictable. gl

Wed, 12/12/2012 - 10:58 | 3055696 Liquid Courage
Liquid Courage's picture

 

 

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

Wed, 12/12/2012 - 20:12 | 3057833 Obadiah
Obadiah's picture

What exactly are you cooking up over there LawsOf?

Wed, 12/12/2012 - 20:32 | 3057880 Brindle702
Brindle702's picture

How did the Russians defeat their system?  They stopped working.  (We pretend to work and they pretend to pay us.)  If the game is rigged so that you can't win then don't play.  Much, much easier said than done of course.  I wonder what the modern day debtor's prison is or is going to be?

Wed, 12/12/2012 - 10:12 | 3055458 monopoly
monopoly's picture

They already failed. And I doubt if their dinner break is at Mickey Ds. And everyone here needs to read this. Exactly what Zero Hedge has espoused time and time again. 

 

Bloomberg: McDonald’s $8.25 Man and $8.75 Million CEO Shows Pay Gap

 

Wed, 12/12/2012 - 10:12 | 3055459 HD
HD's picture

Guess Mitt Romney had one "T" too many.

Wed, 12/12/2012 - 10:44 | 3055626 GetZeeGold
GetZeeGold's picture

 

 

I saw a picture of him putting gas in his car.....he was clearly overqualified for the job. That was close.

Wed, 12/12/2012 - 10:54 | 3055671 HD
HD's picture

Secret Service protecting your every move one minute - pumping your own gas the next.  America IS great!

Wed, 12/12/2012 - 10:12 | 3055461 dick cheneys ghost
dick cheneys ghost's picture

$250 Trillion in paper assets.........

Wed, 12/12/2012 - 10:14 | 3055468 cabtrom
cabtrom's picture

Lol hippies running the globe no wonder it's all "piece and love dude"!

Wed, 12/12/2012 - 10:15 | 3055472 1835jackson
1835jackson's picture

What if the plan is to induce a total economic collapse? If that is the goal they are right on track! Let's remember the true motivations of these PhD's mother fuckers.

 

 

Wed, 12/12/2012 - 10:37 | 3055586 MiltonFriedmans...
MiltonFriedmansNightmare's picture

World domination...fucking sadists.....

Wed, 12/12/2012 - 10:14 | 3055474 ShrNfr
ShrNfr's picture

When you head to the east campus of MIT, you are forced to stop at MIT Medical before you cross Hayward St. and get a lobotomy.

Wed, 12/12/2012 - 10:15 | 3055477 rsnoble
rsnoble's picture

Where are the russian and chinese members?

Wed, 12/12/2012 - 10:17 | 3055484 lizzy36
lizzy36's picture

For three years i have opined that monetary policy is just one real world academic experiment.

Most have no clue who really runs the world:a bunch of men from MIT who completely missed the housing crisis because it wasn't in their models.

Just remember until the day Madoff confessed to his ponzi, investors were clamouring to get into his fund.

Ignorance truely is bliss.

Wed, 12/12/2012 - 10:50 | 3055661 Diogenes
Diogenes's picture

Ignorance is bliss until you wake up in a train wreck with your face on fire.

Wed, 12/12/2012 - 11:18 | 3055781 Uncle Remus
Uncle Remus's picture

That's gonna leave a mark...

Wed, 12/12/2012 - 10:18 | 3055490 Fake Jim Quinn
Fake Jim Quinn's picture

MIT apparently is disengaging from useful scientific contributions to humanity. Is that being outsourced to China as well?

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