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Economic Laws Are Not Optional

Tyler Durden's picture




 

Submitted by Monty Pelerin of Economic Noise blog,

Economic laws are not optional. They are like the laws of physics - inexorable!

economic policy

 

Economic laws are less precise in terms of their timing and effects, only because they deal with human behavior rather than physical particles. Human beings alter their behavior to cope with changing conditions. Particles do not. Free will and the survival instinct make prediction, especially regarding timing, very different and difficult in the human realm. Nevertheless, the laws are immutable!

Long-time readers of this website know that no recovery is possible given past and current economic policies. Initially, it was argued by some that government intervention was necessary and would effect an economic recovery. By now, even the dullest of Keynesians know their policies failed. Yet they continue.

Why would failed policies continue? The political class argues for their continuance, but not on the basis of sound economics. Their arguments are motivated by political self-interest. The appearance of a recovery is more important for politicians facing another election or a legacy than the damage being done to the economy. Remember when the focus of the Clinton campaign against George H. W. Bush claimed that it was the worst economy in fifty years? That was not true, but it was effective.

Stopping the Federal Reserve juice threatens what remains of our economy. No one wants to be known as the “new Herbert Hoover,” although someone will inevitably be tarred with that association.

Early Warnings

This website began in September 2009 recognizing the futility of applied economic efforts to “cure” the problem. The very first post appeared on September 7, 2009  and was entitled No Exit From Economic Mess. To put matters into perspective, the government claimed the recession had ended in June of 2009. This economic lie was apparent to anyone who had a modicum of economic understanding or common sense. The more of the latter one possessed, the less of the former was required.

Over time I have come to believe that the two types of knowledge may now be incompatible — a sad commentary on how the economic profession has been hijacked by the political class. A good rule of thumb is to ignore any economist who is involved in politics. Unfortunately, with government grants, that includes much of the profession, including those never directly employed by government.

The first paragraph of that very first post stated the following:

Doug Noland of www.Prudentbear.com has it right on his “No Exit” Possible scenario. Our economy has become totally dependent upon government spending, interventions and subsidies. There is no recovery in the private sector, nor is there likely to be one in the next several years. Federal meddling will continue to create distortions that will require additional and continued meddling. From a political standpoint, there will be no good time for an exit. However, at some point, the system will not be sustainable. Markets will eventually end the meddling regardless of whether it is politically or economically feasible or timely. When that happens, our lives and economy will never be the same again.

On that same day, there were six other articles suggesting that no economic recovery was possible until policies and conditions changed. Links to them follow:

1. Stocks Divorced From Real World

 

2. Banking Mess where it was said:

Enron-type accounting is allowed to enable banks to keep exposure on non-consolidated subsidiary books. Banks are allowed to value assets at whatever they deem them to be worth rather than accounting standards that have been in place for centuries. Condoning this fraud may defer the political problem. It cannot solve the economic problem and likely makes it unsolvable at some point. Market forces will eventually overwhelm the charade, and put our entire economic system at risk of implosion.

3. Timely Economic Analysis from Dilbert???? The Dilbert cartoon provided a possible reason why economists find it easier to bring good rather than bad news:

It appears that the writer of Dilbert is a better economist than many Nobel laureates who are proclaiming “Green Shoots.”

 

 

4. The Banking System, The Dollar and The Welfare State stated:

There is no mathematical possibility of escaping the economic bind we face without reducing the welfare state. The current financial crisis only exacerbates a situation which long ago passed the tipping point. The Federal government’s total liabilities exceed $100 trillion (most of that from the unfunded liabilities of the welfare state: social security, medicare, etc.). With the financial crisis, we now have an additional black hole, our banking system. The condition of the banking system has been covered up, but that is becoming harder and harder to do as banks collapse under their own weight as a result of deteriorating conditions.

5. The Crash Course by Chris Martenson  presented his ideas of how the policies were economically foolish and mathematically impossible to continue.

 

6. Moral Hazard Destroys Social Capital and Cooperation discussed the corrosive moral effects of an immoral government:

When the “game” is perceived to be corrupt and exploitive, it is easy to rationalize immoral behavior at the level of the individual. Contracts, promises and obligations start to become meaningless. For many, the phrase “is it legal?” replaces the phrase “is it right.” Loopholes in the law trump ethics. Soon even the law becomes less of a barrier as cheating and stealing become acceptable for some.

These were posts on the inaugural day of the website. The passage of time has not changed anything, except the understatement of some of the problems from the first day. The post regarding stock market valuations was arguably incorrect as the market recovered nicely from that point. However, it is valid today, more so than ever.  Almost five full years from the date of these posts, there is less reason for optimism. The economic structure of the country has been further weakened.

The declaration that the recession ended was a lie. Polls show that a majority of the population now agrees we never left the recession. Zerohedge referred to a recent article by Eric Sprott to provide an up-to-date assessment of conditions:

As Eric Sprott points out in his latest letter, “if one looks past headline figures, things are not really getting better. As shown in Figure 1, real disposable income per capita in the U.S. has increased only modestly since the Great Recession. However, all of this increase is due to Government Transfers, not from an improvement in the real economy. If we exclude those transfers from the numbers, disposable income per capita is actually lower than it was at the end of 2005 and has been painfully flat since 2011. Also, those numbers assume that the headline Consumer Price Index (CPI) accurately represents people’s purchasing power.”

 

Presenting our chart of the day: disposable income with and without government transfers.

 

 

And it is not just disposable income: as Sprott explains, “the U.S. economy has been on life support, graciously provided by Central Planners. However hard they try, they will soon realize that no amount of money printing can cleanse the rot of the U.S. economy.”

Here is why for a large portion of the population, “things are not anywhere close to being better, in fact they are worse than before the recession.”

Nothing Has Changed

The smoke and mirrors obfuscating true economic conditions for five years has been deliberate. The economy has not recovered. It has been made more distorted and imbalanced by the futile attempts to pretend that all is well. Government has more smoke and mirrors left. Yet, even the political class now seem to sense that they are playing out the clock without altering the ultimate conclusion. When your time frame is limited to the next election, longer-term consequences of current policies are ignored.

The economic piper will be paid. All that has been accomplished by these actions is a deferral of the correction and the creation of a bigger debt upon which the piper will collect. The warnings expressed on the first posts on this website are as relevant now as they were five years ago.

A massive political cover-up of the true condition of the country has been accomplished at the cost of making underlying economic conditions worse. The economy is no longer growing and people are becoming poorer as a result of the political shenanigans used to hide the true conditions.  As expressed in the very first post:

There is no recovery in the private sector, nor is there likely to be one in the next several years. Federal meddling will continue to create distortions that will require additional and continued meddling. From a political standpoint, there will be no good time for an exit. However, at some point, the system will not be sustainable.

Zerohedge’s recent assessment of current economic conditions indicates that matters may be progressing rapidly toward this end:

Despite the best efforts of The Fed, its apologists, and the commission-taking talking-heads to persuade the world that the US economy is picking up and set to reach escape velocity any minute… the fact is, the US economy (judged on data not fantasy) is hurting. Consensus expectations for 2014 US GDP growth have collapsed from over 3.00% to a mere 1.7% now. But what is more critical is the incessant bleating that data is picking up and suggests a 2nd half recovery… it doesn’t.

The inevitability of what is coming is what is important. The timing remains uncertain. It need not occur in the next week or month. Timing may still be measured in years, but the outcome is more certain today than it was five years ago. The laws of economics make it so. Any geopolitical or economic misstep could trigger the event. Without such a misstep, the charade could continue for a while.

A collapse is coming. It is unavoidable and will be worse than it should have been as a result of political duplicity.

 

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Fri, 07/25/2014 - 21:10 | 5006089 TeamDepends
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A printer in motion will stay in motion unless acted upon by an equal or opposite force.

Fri, 07/25/2014 - 21:43 | 5006151 LetThemEatRand
LetThemEatRand's picture

You know what they say about entropy.   

Fri, 07/25/2014 - 22:26 | 5006232 markmotive
markmotive's picture

Bullsh!t.

The only laws that aren't optional are the laws of physics.

Thats why the next debt crisis is unsolvable.

http://www.planbeconomics.com/2014/07/gail-tverberg-debt-eight-reasons-t...

Fri, 07/25/2014 - 22:30 | 5006241 wee-weed up
wee-weed up's picture

 

 

Economic laws are not optional. They are like the laws of physics - inexorable!

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

Poor idjiot Krugman would beg to differ...

Fri, 07/25/2014 - 22:50 | 5006267 NoDebt
NoDebt's picture

Before there was such a thing as the study of Economics, there was survival.  Economics is the study of survival after the creation of money (in whatever form- cows, gold, fiat currency, etc).  

Economics beyond the micro (individual level) is no different than studying derivatives.  They are a refection of the underlying conditions.  If your only perspective is top-down, you will always be surprised at the individual outcome.  If your only perspective is bottom-up, you will always be shocked by the aggregate.

Sat, 07/26/2014 - 09:23 | 5006851 McCormick No. 9
McCormick No. 9's picture

To continue your thought...

Before economics, survival...

...and survival is nothing but thermodynamics. How can you keep the heat engine fueled?

Money is nothing more than a heat energy index. If you skew the index, you don't neccessarily add more heat to the system.

To a certain small extent, putting more money into the system can create a bump in heat production, but this is limited to the extent perception can drive reality, rather than reflect it. Someone somewhere has figured out the percentage- my guess is less than 2%. Money is a perceptive tool, in that it allows us to conceptualize the heat energy we control. Money is not heat energy in and of itself. But it seems that economists have forgotten this fact.

What do you have that does not require a fire somewhere to produce? Even the grass requires a fire in the sun. When your personal metabolic fire goes out, you're dead. Any discussion of economy that does not remember that fire is at the very foundation of everything is an exercize in fantasy.

Sat, 07/26/2014 - 13:09 | 5007358 Save_America1st
Save_America1st's picture

Great post...I liked that.  Never heard it conceptualized that way.  Thanks man!!!

Now to add some fuel to my fire.  Time for another brewsky!

Sat, 07/26/2014 - 10:52 | 5006997 Sean7k
Sean7k's picture

This artiicle is a mess, starting with: http://www.merriam-webster.com/dictionary/immutable. Economic laws are immutable? Does the author understand what this word means?

There are NO immutable laws. Laws are a reflection of our limited understanding of how the universe functions. Which is why all laws have a tendency to be "updated or thrown out". We console our curiousity to temper our fear.

The economy is functioning perfectly, just as it has been intended, and benefits those whom designed and operate it. Everything else are the arguments meant to confuse and anger, thus making us too stupid to act. Solutions are in plain sight, but never implemented. Why? If you need to ask, you aren't paying attention.

Without the ingrained prejudice we receive as education, we have the ability to make observations and resolve the pressing problems of life. All the extra stuff is within our grasp as well, as we have time and leisure to pursue it. However, being slaves, our lifelines are determined and controlled by others. We receive what we are allowed and no more. Some societies allow more than others. 

All created through the nexus of the State, Law and Money. It will never change until all three are eliminated.

Sun, 07/27/2014 - 02:01 | 5009008 Carpenter1
Carpenter1's picture

Yes, yes, we get it.

How about "there are no immutable laws, but given the limited power and intelligence of man, there are limits which will bind him, until and unless his power increases."

 

Sheesh! 2nd year physics students are so uppity

Sun, 07/27/2014 - 08:01 | 5009264 Sean7k
Sean7k's picture

Do you really think intelligence is a function of power? How could we know our limits, if we are not free to explore them? Even genetics, which could be a result of intentional outside controls limit our functionality. No, I suggest you don't 'get it". You are caught in the same group think mentality drilled into all students and professors. 

We live in a manufactured reality designed to make our slavery palatable and challenging. This reality is maintained with certain tools and processes, which compose our life experience systems. Liberty only exists as an anomaly which surfaces in certain individuals to be explored at great cost.

Tue, 07/29/2014 - 00:42 | 5016326 TheRedScourge
TheRedScourge's picture

You can't eliminate money without implementing full communism, which of course never lasts long before a major catastrophic collapse. Money is people's representation of value. Had you said centrally controlled currencies perhaps I would have agreed.

Fri, 07/25/2014 - 22:31 | 5006244 chumbawamba
chumbawamba's picture

Bullshit!  You just live in a bubble universe.

I am Chumbawamba.

Fri, 07/25/2014 - 23:18 | 5006331 TeethVillage88s
TeethVillage88s's picture

I should read the article and the link above by commenter...

But historically

We have all been fucked since 1913 and mostly didn't fight it or even realize it. Physics Schmisics. If you don't know you are a boiling frog, you might be smoking the bad hooch, drinking the bad kool aid, and maybe brown-nosing some celebrity or supervisor.

Historically the Intelligentsia who created Russian Communism in the West probably knew more about the world than 70% of US Citizens. This looks like a problem.

Communism's first rule is to educate before the revolution. They aren't doing this in the USA. But that is not to say that Socialist or Communist haven't decided to "Dumb Down" Americans.

We know that we have a US Intelligentsia who "Rule" us, and we know that we are not taught the Truth about History. They seem to be leading us to Slaughter, but who are they? Globalists are just Elites who want to make more money than the rest of us. And they want o prove they are superior, higher, or of a higher class.

Well as far as I can tell. Correct me here.

Notes; Propaganda that led us to WWI & WWII. I can't see justification for the Vietnam War even if Paranoia led us to the Korean War. All later wars seem like bullshit. Covert History is even more twisted.

Sat, 07/26/2014 - 00:05 | 5006424 TeethVillage88s
TeethVillage88s's picture

Value Intelligentsia VS. Viking

US Culture is now Militarized (Good or Bad) and our people have changed to accept groping and abuse by Federal Government when military service is contracted.

But some will say I don't know shit.

I disagree.

We have a unique US Intelligentsia:

A) Military Schools
B) Military Families
C) Constitutional Scholars & University Historical Scholars
D) Business & Banking Conservative Cultures from 1800
E) Old Timers that retain the True History of USA

Study Bitcheez

Sat, 07/26/2014 - 10:19 | 5006916 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

"But that is not to say that Socialist or Communist haven't decided to "Dumb Down" Americans."

Yes, I'm sure Socialism or Communism are to blame for things like Creationism.

 

Sat, 07/26/2014 - 15:00 | 5007664 TeethVillage88s
TeethVillage88s's picture

There are other Ideologies and views.

Military Republic = Fascism
Subgroups are
- Kleptocracy
- Globalism

Socialism in the USA has strong advantages IMHO Social Security, MEDICARE & MEDIAID, and Regulations that Reduce Fraud, Highways, Streets, Water Systems, Power & Electric Utilities, Emergency Services, Police...and after 100 years we won Worker Rights for overtime pay, holiday pay, equal pay for women, child labor laws, and even minimum wage.

The Great Depression taught us that only the government could protect the people from economic problems or bad banking.

On the other hand Fascism is the only Ideology (including globalism & Kleptocracy) that would Dumb Down a Population to make them easier to control, to push down wages, and to create a bigger lower class. Unless you look at the Hacienda System which is either serfdom or fascism anyway.

Sun, 07/27/2014 - 02:04 | 5009009 Carpenter1
Carpenter1's picture

It'll all burn

 

Vancouver financial advisor www.vancouverfinancial.net Vancouver Financial advisor WWww.vancouverfinancial.net Vancouver Financial advisor www.vancouverfinancial.net

Sat, 07/26/2014 - 01:00 | 5006486 Ariadne
Ariadne's picture

Which lame guesses are you calling laws now?

Sat, 07/26/2014 - 09:57 | 5006902 Kirk2NCC1701
Kirk2NCC1701's picture

"There is nothing more predictable than the Laws on Nature, and laws of human nature" -Kirk

Plan accordingly.

Sat, 07/26/2014 - 10:42 | 5006970 Jumbotron
Jumbotron's picture

"Bullshit.  The olnly laws that aren't optional are the laws of physicss."

 

markmotive.....you need to read up on quantum physics.

 

 

 

 

 

Sat, 07/26/2014 - 00:56 | 5006483 Ariadne
Ariadne's picture

No Satan, what do the Krugmanati say about entropy? Which by the way was disproven in the 1970s.

Sat, 07/26/2014 - 02:43 | 5006574 LetThemEatRand
LetThemEatRand's picture

I'll tell you 23 years, 4 months, 11 days and 47 seconds.  Unless you fly coach in the next few months, in which case sooner.  Fucking free will.  I told him it was bullshit.  Anyway, see you later.

Sat, 07/26/2014 - 01:05 | 5006491 Duffy
Duffy's picture

Entropy in information theory terms is information that is lost and unknowable - probably just about everything that ends up in a black hole, but not necessarily *everything* as even Hawking admits.

 

The more economists, imho, anyway, construct theories to explain reality, the more information (true, real facts - knowledge of that which is the case) becomes lost.

 

Therefore, economic "science" increases entropy as to understanding the thing-measured, the real set of economic interactions in a system.

 

You know...  probably.

Sat, 07/26/2014 - 07:19 | 5006739 Sparkey
Sparkey's picture

Excellent thinking Duffy!

Sat, 07/26/2014 - 08:29 | 5006797 Headbanger
Headbanger's picture

Good point Duffy.

However me thinks it goes moar like the moar economists and governments do to affect the economy, the moar disorder (entropy) they create just like with any physical process.

And thus disorder expands exponentially to the point of catastrophic failure instead of allowing the system to self correct and stabilize.

ANd all this is from the stupid delusion we've been told that THEY can do something about it.

They sure can!

They'll mess it the fuck up even worse!

Fri, 07/25/2014 - 21:43 | 5006154 SHEEPFUKKER
SHEEPFUKKER's picture

Bravo!!

Fri, 07/25/2014 - 22:55 | 5006282 QEternity
QEternity's picture

Things that cannot go on as they are, go until they can't

Sat, 07/26/2014 - 15:28 | 5007726 luftmensch
luftmensch's picture

Nice recap of ZH history Tyler.

 

Basic premise is dilution of monetary supply, propping up of assets, basically using duct tape and paper clips instead of actually fixing the system.

 

Paper money isn't worthless, I'd say its main value is the tax revenue stream and the weapons to enforce it.  And the ability to keep the tax base strong by having a functional system in place for economic activity.  The house needs to get its share.

 

So if we go to a new commodity-basket backed currency (say a combination of metals, agriculture, clean, water, etc., more diverse than just gold), eliminate the Fed, no more fractional-reserve banking, castrate the bankers, did I miss anything else?

 

If we go to this new libertarian, in theory more "stable" model, wouldn't there be a complete melt-down and collapse of the world as we know it?  So much of the current system requires the ongoing hype, hope, irrational exuberance...if it all came crashing down at once, seems like it could be catastrophic.  Also, if just one country does it, that country could easily become the bitch of the rest of the world.

 

So maybe this economic slow-motion crash that ZH has been describing, is actually the best case scenario...just a constant gradual erosion of economic power, while keeping the vast majority ignorant and docile…

 

It really comes down to how much for the oligarchs, for the people, for me...and does the pie slicing reflect our personal and social values or not.

Fri, 07/25/2014 - 21:14 | 5006093 ekm1
ekm1's picture

Another rare Zerohedge nonsense. 

There is no such thing as 'economic law'.

 

Only nature has laws. Economics is politics and war, based people's decisions and free will.

Fri, 07/25/2014 - 21:24 | 5006112 buzzsaw99
buzzsaw99's picture

+1 that was going to be my comment. immutable economic laws? name one. ridiculous assertion by the author. this post is wordy, pointless, absurd.

Fri, 07/25/2014 - 21:58 | 5006186 AlaricBalth
AlaricBalth's picture

This economic law may not be immutable, but in western democracies it has certainly proven to be true.

Wagner's law, also known as the law of increasing state spending, is a principle named after the German economist Adolph Wagner (1835–1917) He first observed it for his own country and then for other countries. For any country the public expenditure rises constantly. Wagner's law suggests that a welfare state evolves from free market capitalism due to the population voting for ever-increasing social services.

Fri, 07/25/2014 - 22:22 | 5006224 SafelyGraze
SafelyGraze's picture

the first law of front running: re-order the pending trades until yours has executed first

 

Fri, 07/25/2014 - 22:23 | 5006227 nmewn
nmewn's picture

de Tocqueville observed much the same thing but attributed it (the evolution of the welfare state) to democracy, not free market capitalism (where there are voluntary winners and losers) who risk their own saved capital.

What we have now is a corruption of free market capitalism. The losers are subsidized and the winners are as well (the grub stake is not theirs) the subsidy given to welfare (by winners) is posited as charity...but its really graft & bondage.

I guess its referred to as philanthropy now ;-)

Sat, 07/26/2014 - 01:08 | 5006496 Duffy
Duffy's picture

I can't tell, nmewn, if you'd agree that most welfare, in this sense, is distributed to banks and large corporations.  As to future unfunded entitlements and such... projecting forward 50 years, perhaps a closer call.  But perhaps not.

Certainly agree that what critics of "capitalism" are criticizing isn't actually capitalism at all. 

Sat, 07/26/2014 - 08:29 | 5006795 nmewn
nmewn's picture

Absolutely Duffy.

I always defer to the wisdom that a simple farmer shared with Rep. Davey Crockett...

http://archive.lewrockwell.com/orig4/ellis1.html

...simply, its not theirs to give away in the first place.

Put another way, if there was a rule, a law, a restraint that held that for every dollar the President, the House and the Senate misappropriates a percentage of that dollar comes off their retirement, salary, health benefits, travel expenses etc...we would wind up with one of the most frugal governments on the face of the earth ;-)

Sat, 07/26/2014 - 10:15 | 5006917 shovelhead
shovelhead's picture

Pay tied to performance???

Like the real world???

"Wow man...like, that is...way out there...Spaceville."

-Maynard G. Krebs-

Sat, 07/26/2014 - 14:38 | 5007596 Jumbotron
Jumbotron's picture

There's only one thing wrong with your observation nmewn.  The government only does what the people want.....or enough people are incapable or unwilling to do what it takes to MAKE them do what SHOULD be done.

Either way.....our reps do what we want or are willing to fight for.   You always have the anwer to that by what laws we have.....and what laws are ignored.

Ain't   N O B O D Y ' S  fault but our own.

Sat, 07/26/2014 - 15:17 | 5007707 TeethVillage88s
TeethVillage88s's picture

nmewn;

I know some old timers who like guns, served in the military, and fully expect their Social Security & MEDICARE when they reach 64 years old. They paid into it.

And since they lost their pensions in the 1980-90s to plant closings, they are real touchy on the subject.

Anyway I like SS & MEDICARE. They were supposed to be Trust Funds. Corrupt Government takes the money for Vietnam or other reasons. And of course the corruption of money means they won't fix MEDICARE & MEDICAID or even maintain these programs and monitor them as stewards.

Just like Congress is supposed to Steward Fraud & the Economy. They have become Fascist Globalists.

Sat, 07/26/2014 - 14:43 | 5007613 AnAnonymous
AnAnonymous's picture

de Tocqueville observed much the same thing but attributed it (the evolution of the welfare state) to democracy, not free market capitalism (where there are voluntary winners and losers) who risk their own saved capital.
_____________

Indians have finally made a breach in the US so they can risk their own saved capital?

Sat, 07/26/2014 - 15:17 | 5007693 TeethVillage88s
TeethVillage88s's picture

nmewn;

Did we have a Welfare State in 1840?? Wouldn't most place it at the feet of FDR or LBJ? OHSA signed by Tricky Dick in 1970.

Democracy in America (appearing in two volumes: 1835 and 1840) and The Old Regime and the Revolution (1856).

Sat, 07/26/2014 - 07:42 | 5006742 Urban Redneck
Urban Redneck's picture

One western democracy where Wagner's law doesn't hold up in Switzerland (one would have to play the nominal spending game on a long enough time line... to call it a law).

Either with respect to the people voting themselves ever increasing social services (links are in German, Wankerpedia has the unreliable version)
http://www.admin.ch/ch/d/pore/va/vab_2_2_4_3.html

Or with public expenditures always rising (either nominally, in real terms, on a per capita basis, or as a share a share of GDP) (again- in German since OECD has a pay wall, but any translator plugin will work)
http://www.pxweb.bfs.admin.ch/Dialog/varval.asp?ma=px-d-18-3A01&ti=Ausga...

And yet there's still too much public spending increase in Switzerland (for which I blame the EUphiles and the Federal Constitution of 1999).

Fri, 07/25/2014 - 22:11 | 5006210 Citxmech
Citxmech's picture

How about Gresham's law?

Math in accounting would be another candidate - ie Total debits must equal total credits for each transaction.

Sat, 07/26/2014 - 07:44 | 5006752 Urban Redneck
Urban Redneck's picture

Finance (which includes accounting) and economics are not the same.

Gresham's law also doesn't hold when both the bad and the good money are both overvalued, both with respect to the domestic value of any asset underlying the money, and with respect to the foreign value of any asset underlying the money. Fed charlatans/economists have other arguments but then they also have an interest in defending bad money.

Sat, 07/26/2014 - 12:26 | 5007253 Citxmech
Citxmech's picture

Regarding finance - I basically agree with you - BUT - an economic theory that disposes with general accounting principals at its foundation, I feel, is doomed to be flawed from the start.  Look at what the accounting changes approved under Bush II (Mark to Fantasy) have done to market valuations in the stock market.  

The extension of this principal would be the economic law that you can't print your way to prosperity (at least for very long - there will be a reckoning). 

Regarding Gresham's law - these principals are all processes - you can't take a snapshot and say, "see, there are imbalances - hence the principal is flawed."  We're talking about tendencies and flows in a chaotic system.  

This is similar to the weather.  Hot air rises and cold air sinks.  That is a law.  Doesn't mean we can predict the weather next Tuesday with certainty. 

FYI, I do not hold up economics as a "science" proper because it's implementation mostly fails Karl Popper's falsification protocol - but that does not mean that there are not economic truisms.

PS  My favorite:  "There is no free lunch."

 

Sat, 07/26/2014 - 16:48 | 5007911 Urban Redneck
Urban Redneck's picture

The difference I see between economics and finance, banking, accounting is that in the "applied pseudo sciences", there is a very clear distinction between theory and practice (which is dictated by local laws/regulations). In theory- a derivative is marked to a valuation model; in practice, whether that valuation model is market value, maturity value, or some number Blythe Masters pulls out of her ass is up to FASB.

In regards to Gresham's Law- what I see as the strongest argument over time against the theory being a law, as opposed to a truism, is the existence of coinage, both PM and base-metal. The US has had copper, nickel (and silver) in side-by side circulation where the underlying melt values fluctuate over time and against each other - as long as the good, bad, and indifferent money all exceeds the melt value they can peacefully coexist over time, but as soon that changes Kyle Bass calls his banker with a coin fetish.

Sat, 07/26/2014 - 09:34 | 5006861 tmosley
tmosley's picture

Economic laws are self referencing, and therefore difficult to define mathematically. That doesn't mean they don't exist.  Supply and demand is certainly real. 

Most economists are not scientists, even though economics is a science.  It's just that economics is the most difficult science imaginable, due to its self referencing nature.  Were we to create an algorithm that could accurately describe it, you would find that you have a strong AI with computational power equal to or greater than every human being on earth put together.  

Austrians recognize this fact on a subconscious level, dismissing it as "impossible" to describe using math, and therefore attempt to use their own brains as oracle machines.  Human brains are very, very good at modeling other human brains, so they make accurate predictions (x policy will cause Y outcome), but they can't predict timing or magnitude.  Humans simply aren't smart enough.  And if we were, then we still wouldn't be smart enough, as the complexity of the calculations increases with the intelligence of the members of the economy.

Sat, 07/26/2014 - 10:08 | 5006910 shovelhead
shovelhead's picture

How about this one:

Spend more than you make, borrow to fill the gap, but eventually* you WILL BE BROKE.

 

*Printing until nobody takes your paper still falls under eventually.

Fri, 07/25/2014 - 21:24 | 5006114 tickhound
tickhound's picture

Freaking amazing but I absolutely agree with you.

Total BS.

The article assumes THIS economic model is the only way of life.

And for you Easter Islanders who don't understand... Your problem wasn't a lack of trees, it was the model itself that made cutting the last one down WORTH THE BOOST.

We don't live to work, we work to live. We chase and scalp cuz the model says chase and scalp... Like the easter island model said build statues out the ass.

Changing the LOL laws of this economic bullshit we call a model for life is easy. Most people cog dis right there.

Fri, 07/25/2014 - 21:52 | 5006166 buzzsaw99
buzzsaw99's picture

if there were such a thing as economic law and that being in line with capitalism as a central tenet then easter island is the exact result you get every time. the author makes it sound like (vague, nonexistent) economic laws, if obeyed, yield good results whereas violation of those (man made arbitrary, theoretical, conflicting) precepts results in negative consequences. bollocks.

Fri, 07/25/2014 - 22:11 | 5006209 DavidPierre
DavidPierre's picture

Derivatives: Abuse, Props, Risks

By: Jim Willie

The topic of financial derivatives is a huge can of worms. The subject has arisen in the financial press much more in the last few years since the global financial crisis turned critical and became a clear case of grand struggle to prevent a veritable collapse. In a loose sense, the derivatives are the scotch tape, bailing wire, band-aids, and chewing gum holding the system together, the glue and adhesive, with rose colored glasses used with a large amount of deception.

The 1987 stock slam that occurred was a wake-up call. The response was the creation of a derivative banking foundation of vaporous substance. It was a shoddy attempt to compensate for the gross insolvency of the US Banking system.

The return to the Gold Standard is the answer, but the clean-up crews will be busy for a long time. The Gold Price will reach incredibly high levels when the derivative implosion occurs, which should occur when the East introduces a legitimate gold-backed new BRICS currency for trade settlement.

The fallout will be tremendous, as the USDollar is rejected on the global stage.

The United States is a hair away from losing both Germany and France to the Eastern Alliance. They will embrace gold, and walk away from the USDollar, with a certain absorbed cost.

Great changes are coming like a fierce new storm.

http://news.goldseek.com/GoldenJackass/1406317623.php


Sat, 07/26/2014 - 01:12 | 5006501 Bastiat
Bastiat's picture

The Germans will lose the gold held by the US of they go east . . . but it's not like they have it anyway.

 

Sat, 07/26/2014 - 01:10 | 5006498 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

If Glass-Steagal was kept we would not be in this mess to begin with.

GS was economic law. Dodd-Frank does not replace Glass-Steagal IMHO. Leverage got us here without the leverage we would not have

tbtf.

Sat, 07/26/2014 - 09:40 | 5006868 tmosley
tmosley's picture

That's just handwaving.

Easter Island didn't have capitalism.  They were a tribal society, with competing chiefs trying to aggrandize themselves.  If they had had capitalism, there would still be tree farms on the island.

Sort of like saying that if there were such a thing as laws of physics, there would be no such thing as a black hole.  No, the laws of physics account for that just fine.  You just have to have the right conditions.  In the case of Easter Island, you needed short sighted politicians, proto-communism, and limited resources.  Put communists in charge of the Sahara, and there will be a shortage of sand within 20 years.

Sat, 07/26/2014 - 06:56 | 5006722 eclectic syncretist
eclectic syncretist's picture

Economics is based on supply and demand, but when a Central Bank is allowed to interfere it becomes increasingly based on ARTIFICIAL supply and demand.  This perversion causes a great deal of confusion for those who persist in believing our economy is honest/straightforward supply and demand.

Sat, 07/26/2014 - 07:46 | 5006754 buzzsaw99
buzzsaw99's picture

wrong. supply and demand is a theory that falls on its face time and again. you can demnd whatever the fuck you want but after you cut down the last fucking tree the jig is up.

Sat, 07/26/2014 - 09:41 | 5006872 tmosley
tmosley's picture

No, when you cut down the last tree, the price goes to undefined.  If they had had a concept of private property, then they would have worked to find alternatives, or better, they would have grown trees to sell to the idiot chiefs.  

Sat, 07/26/2014 - 12:26 | 5007231 rwe2late
rwe2late's picture

 tmosley

I believe you are missing the point

that measuring "demand" by "price" (i.e. money)

is quite arbitrary to begin with.

Thus, for example, 100 starving people with no money would have no "demand" for food.

Sat, 07/26/2014 - 20:43 | 5008411 tmosley
tmosley's picture

But they have labor which they can trade for money.  How much labor are they willing to trade for food?

Sun, 07/27/2014 - 22:23 | 5011312 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

John Steinbeck's The Grapes of Wrath gives us the answer. Without social subsidy the poor cannot afford to eat. They cannot trade their labour if they cannot find work. USA foodstamp and unemployment programmes are serving their 10 million or whatever labourers lunch every week. Are you saying they don't want to sell their labour for money to buy hoola hoops, and frisbies, and Chicken McNuggets, anymore? 

Sat, 07/26/2014 - 07:51 | 5006763 caShOnlY
caShOnlY's picture

The article assumes THIS economic model is the only way of life.

Economic models are a way of life for a currency and how it exists, works and plays.   We are forced into that model by the laws of "legal tender".   The current model is now FUBAR and the currency is being abused to the point of certain death. Ask Saddam and Muammar about the economic model.  Russia???? lololol......... 

You do in fact do live to work, your indoctrination into education made sure of it ... "and what about you little Joey, what do you want to be when you grow up?".  Hopefully Joey will make a lot of money and retire early, his reward for "chasing and scalping"..

You can change your life but you can never change the economic model as you have no choice but to use their currency at some point.  It is a matrix.  I call you Truman.

Sat, 07/26/2014 - 13:27 | 5007381 tickhound
tickhound's picture

So I return to this thread and you call ME Truman?

If anyone has been indoctrinated and funneled down a narrow corridor it's you. Few of you can ever see a society without some currency measurement. Few of you can see past monetarism. Therefore few of you can see technology and it's labor model effects. And therefore, most of you cog dis as to understand the capability of technology even today... Let alone tomorrow. Its what keeps you right there like a good little bitch.

I feel like taking down your post point by point but I'll just give you this regarding your stuck within the matrix hopeless little Timmy living to work analogy.

Apply this to your "never can change the model" bridge you're selling...

A robot doesn't require incentive. It is not a consumer. It doesn't require laws governing "FAIRNESS." It doesn't require the services, the protection... It doesn't go to school on credit.

It doesn't care about abundance or scarcity, capitalism or socialism.

IT DOESN'T DRIVE AN SUV 60 miles to work.

The Models are already broken.

You can keep your wage slave scarcity based labor consumption model for now. But the trend isn't in your favor.

Sat, 07/26/2014 - 21:31 | 5008521 caShOnlY
caShOnlY's picture

A robot doesn't require incentive. It is not a consumer. It doesn't require laws governing "FAIRNESS." It doesn't require the services, the protection...

But is has a cost: cost to purchase and a cost to run and a cost to maintain.  That cost is absolutely factored PRIOR to its installation based on the "model".

I don't sell bridges and I don't live in some world where I write profound statements of stupidity.  No matter what you do in life you will need something and that is where the "model" is born.    Now run along and write some more profound bullshit that only makes sense to you and smoke some dope that you paid for with the money from inside the "MODEL".

Sat, 07/26/2014 - 21:47 | 5008550 tickhound
tickhound's picture

This is a serious reply? Yes it requires energy and has a cost. Just like you. But it is increasingly cheaper than you, and doesn't whine like a little bitch and grasp at strawmen. It doesn't call in sick and doesn't need to get his bitch ass beauty sleep.

It doesn't care when I fuck your girlfriend, and doesn't want a paid vacation to recover.

If it didn't cost less ALREADY you fucking "gotta do something" status quo freak, articles like this wouldn't exist.

Your herd is thinning. I know you're upset.

Sun, 07/27/2014 - 08:21 | 5009281 caShOnlY
caShOnlY's picture

everything can be modeled.  It can be measured.  It can be plotted.  supply and demand is a model.  what the market will bare is a model.   I am talking a model of measurement or statistics.   You hate the article because what I believe you are trying to say is "CENTRALLY PLANNED" model.   I hate it too, but what can I do?  

We are controlled by:

1.) the currency we (are forced) use

2.) cost of the currency (interest rates)

3.) value of the currency

4.) taxes, taxes, taxes

5.) regulations 

6.) lies

There is one economic law that governs all:   You have to produce to purchase.    We have, as americans, gotten away from that for some extent through borrowing and now money printing, but it won't last forever.  This TRUMAN SHOW will end. 

Fri, 07/25/2014 - 21:25 | 5006116 Hugh G Rection
Hugh G Rection's picture

Hank Paulson called bullshit on this in 08

Sat, 07/26/2014 - 06:21 | 5006706 what's that smell
what's that smell's picture

immutable laws?

1). it is better to run with the herd than get run over by the herd.

2). it is better to jump off the bridge with everyone else than to be alone.

3). my god is great and your god sucks.

4). death, taxes, and dirty underwear.

Fri, 07/25/2014 - 21:28 | 5006130 tmosley
tmosley's picture

Humans, given the same conditions, will behave in the same way en masse.  There is such a thing as human nature, and as a result, there is such a thing as economic law.

You can ignore economic law safely, but only if there are no other humans in the equation.  Perhaps that is the goal of these economists.  Sort of like a more twisted version of The Highlander, where there can be only one, and the Prize is poverty and an early death.

Fri, 07/25/2014 - 21:38 | 5006146 tickhound
tickhound's picture

I see what u r trying to say. But... Below. Or... Maybe I misunderstood. Regardless... Below.

Money and profit had a dramatic influence on, what many argue, is the human "condition." The human nature you describe, could be just symptoms of the condition created by a realized need for monetary accumulation.

Examples of this "re-conditioning" can be found throughout history... to include many native american cultures. Satisfaction in a less complex culture may have been to one's ability to provide for the entire tribe, while being wise enough to waste little, and worship the animal and herd that provided such. While reward under monetarism, which defines profit differently, may be to provide nothing for anyone other than a few, being wise enough to waste whatever was unprofitable monetarily, and preserve little from the source of that profit. To be a Trump.

It can be argued that babies are not born seeking profit, seeking money, seeking hoard, seeking wealth... these are conditions learned. Humans aren't born with an understanding of poor or rich. These are monetary conditions. These are learned. Humans are born with few real needs... food, shelter, love from the parent.

If one is to argue something such as nature vs nurture, one should separate it from the premise of money. Wealth accumulation is a learned behavior, not a natural human instinct. A mother's love for a child is instinctive, while a mother's love for money is not. This is a learned behavior.

An isolated culture that suddenly found itself with the understanding of current day technological innovation, may handle the technology much differently than we might expect. Would a tribe, for example, used to killing and providing only what it needed to survive and maintain its culture, suddenly kill every buffalo by the push of a button simply because it could?

To me, that would depend on the culture itself.

The argument, however, is nearly speculative now, as monetarism has encompassed the globe. But this system has its limits... as we are now beginning to understand. And, because of this, the arguments of what is "instinct" and what is "learned or conditioned" are beginning to re-surface.

Fri, 07/25/2014 - 22:23 | 5006226 Salsipuedes
Salsipuedes's picture

Indeed. There are still some relatively unaffected humble, intelligent, sustainable communities around the world. Of course the inroads by the Mad Men rages on exponentially apace, which is why the only hope is a collapse of the Central Banks. The sooner the better.

Fri, 07/25/2014 - 21:38 | 5006148 ekm1
ekm1's picture

Humans have complete free will. Even God does not infringe that.

 

But, but joining into crowds, individuals decide freely to give up part of their free will, thus choosing leaders to make decisions for them.

 

This is nothing like an immutable law of nature. Humans freely give up part of their free will, .........until they don't.

Fri, 07/25/2014 - 21:48 | 5006163 fonzannoon
fonzannoon's picture

ekm you have been gone a year. You are going to be very surprised at the level of nonsense that goes on here. It has certainly ratcheted up a few notches.

Fri, 07/25/2014 - 21:51 | 5006173 ekm1
ekm1's picture

Yes, I know. I kept reading the posts. Didn't pay attention to comments though.

:-)

Fri, 07/25/2014 - 21:58 | 5006185 fonzannoon
fonzannoon's picture

you should have done it the other way around :)

Fri, 07/25/2014 - 23:21 | 5006339 Anusocracy
Anusocracy's picture

Free will is pretty much of an illusion because your conscious mind is very often the last thing that knows what is going on in your brain. It rubber stamps what is going on, leading to a false notion of being the originator of it.

http://www.thegreatdebate.org.uk/MentalismCB.html

The significance of these comments is that Hamilton's insights were almost exclusively into the fundamental mechanisms of evolution: natural and sexual selection, population genetics, and Mendelian inheritance. Furthermore, it is these very mechanisms which arouse most resistance in the general public when they are invoked as explanations, causes or foundations of human behaviour. Such invocations typically attract denunciation as 'reductionistic', 'deterministic', 'sexist', 'racist', and so on. But what most of such reactions share in common is their mentalistic bias: they are offended by the claims of evolutionary and genetic explanation because they appear to impugn mentalistic agency - the belief that, not only do we have minds, but that our minds and not our genes or evolved psychology determine our behaviour.

Scientific insights also appear to question mentalistic states - especially consciousness, the quintessence of mentalism - because here, as elsewhere with mentalistic subjectivity, the facts now strongly suggest that consciousness is very much the last part of the mind to become aware of what we are doing (Libet, 1985). And it is now an irrefutable fact that the vast majority of what goes on in our brains does so in total ignorance of our consciousness as such (LeDoux, 1996). This in turn casts doubt on the true nature of mental contents such as beliefs, emotions, and intentions, and generally makes mentalistic subjectivity seem worryingly different from objective, scientific knowledge of the mechanisms of the brain and mind.

Sat, 07/26/2014 - 08:15 | 5006781 Sparkey
Sparkey's picture

You've got it Anusocracy, the great Human delusion is that, 'Consciousness', that function of the Brain involved with words and explainations can 'Understand' and 'guide' our behavior to ever more favorable out comes. Think, for a moment of the hubrus and insanity encapsulated in that delusion, the common man may have a vocabulary of five or six thousand words, the truly exceptional may command twenty, or perhaps twenty five thousand words, the madness is thinking we can somehow string them together in a way which will let us 'Decide' our own fate, or create the 'Fate'we desire.

Instinct is "A priori", all life is controlled by instinct, the conscious function creates explainations, as in,  we did this or that behavior, because!!! We believe these explainations because they are right there in our own heads, if you don't believe your own thoughts you must be crazy, everybody would like to think themself's intelligent, with a vocabulary of twenty five thousand words think of the senarios which could be created, and believed, to buttress you own feelings of self importance, people want to be important and known, we, unconsciously, all long to be Kardashians now and post the X-ray of our rears on Facebook, the rise of consciousness opened the door for self delusion, I doubt there are any undeluded people living under the influences of modern media.

Sat, 07/26/2014 - 10:30 | 5006937 shovelhead
shovelhead's picture

So what exactly is it that keeps you from humping your buddy's hot wife?

Sat, 07/26/2014 - 20:17 | 5008363 Anusocracy
Anusocracy's picture

The essence of this is: "Why do you want to hump your buddy's wife?".

BECAUSE YOU ARE WIRED TO.

Why don't you want to hump your buddy's wife's dog?

Because you're NOT wired to.

Hopefully.

Sat, 07/26/2014 - 11:40 | 5007145 GoldenTool
GoldenTool's picture

No matter how straight the gate or charged with punishment the scroll.

I'm the captain of my fate.  I'm the master of my soul.

Fri, 07/25/2014 - 22:07 | 5006189 infinity8
infinity8's picture

You just set off the independent thought detector!

Fri, 07/25/2014 - 22:25 | 5006228 deflator
deflator's picture

 If the status quo is beneficial for you then you are unlikely to have an independant thought detector.

Fri, 07/25/2014 - 22:47 | 5006266 infinity8
infinity8's picture

"If the status quo is beneficial for you then you are likely to have an independant thought detector (NSA)."

Can you hear me now?

Fri, 07/25/2014 - 22:28 | 5006235 nmewn
nmewn's picture

Its good to see you comment ekm ;-)

Fri, 07/25/2014 - 22:30 | 5006240 ekm1
ekm1's picture

thx a lot

Fri, 07/25/2014 - 22:41 | 5006254 FeralSerf
FeralSerf's picture

"Humans have complete free will. Even God does not infringe that."

Nonsense! Not even "God" has free will.

"There is no mind absolute or free will, but the mind is determined for willing this or that by a cause which is determined in its turn by another cause, and this one again by another, and so on to infinity." -- Benedictus de Spinoza, 1673

Fri, 07/25/2014 - 22:45 | 5006260 ekm1
ekm1's picture

Who is wiser, Spinoza or I?

Fri, 07/25/2014 - 23:15 | 5006325 fonzannoon
fonzannoon's picture

ekm no bullshit, watch a movie called "Mon Oncle D Amerique" with Gerard Deperdieu. Someone sent it to me a long time ago. All about free will. Great film.

Sat, 07/26/2014 - 14:03 | 5007508 ekm1
ekm1's picture

I've studied all kinds of philosphies.

'Free will' is something you understand yourself you have it by doing some self analysis.

 

Your brain is totally free, absolute free. You can think and want anything.

 

Achieving your desires and wants is a different story, there are restrictions, but thinking them is boundless, zero restrictions, total free will

Mon, 07/28/2014 - 11:33 | 5012810 piratepiet
piratepiet's picture

"...and so on to infinity".

Only problem with this quote is that we seem to be very finite creatures in our current form ( both our past and  future are finite ).

Sat, 07/26/2014 - 08:52 | 5006823 tmosley
tmosley's picture

No, they are immutable.  Human beings won't allow the law of supply and demand to be broken.  If you misprice an asset too high according to that law, you will sell little or nothing. Humans won't give you their entire world for a gadget of little value.  If you misprice an asset too low, they will not refrain from buying it.

You can only violate supply and demand when there are no other people, though that is sort of like saying you can violate the law of universal gravittation by living in a world without the Higgs Boson.

Sat, 07/26/2014 - 11:41 | 5007147 GoldenTool
GoldenTool's picture

I'll pay you a million dollars for a live dodo bird.

Sat, 07/26/2014 - 11:42 | 5007151 GoldenTool
GoldenTool's picture

On second though make it a T-rex

Sat, 07/26/2014 - 11:59 | 5007185 tmosley
tmosley's picture

A million might get you a dodo, but DNA degredation makes it much more expensive to get a T-rex.  Assuming there was no way to do it, then you have mispriced those animals.  The supply is zero, as is the potential supply, thus the price is undefined, ie infinite.

If you were trying to make a point, you didn't communicate it.

Sun, 07/27/2014 - 12:45 | 5009778 FeralSerf
FeralSerf's picture

In this case "undefined" and "infinite" are not synonyms. Price cannot be infinite without corresponding demand.

There must be price discovery for there to be a price.

Fri, 07/25/2014 - 22:27 | 5006231 alfaafla
alfaafla's picture

If free will were then coerced by rationality, sure. Everything is rational, even irrationality. Economics is more interested in scarce resources, time among which. Politics and war only are the result of how to distribute and use those resources.  For example, how would abortion result from use of resources? If we first ignore the dogma of religion, we see a trend of abortion being more and more accepted to date. People are making, more often without imposition, a decision between time and resources; the family of which may or may not decide correctly if they have beforehand, and if not then would require assistance from the collective at a later date. The only thing the collective could do, in a case where a family decides to terminate, is decide if itself has the resources to remove and care for the fetus from the womb; something I'm aware is impossible up until 7 weeks gestation.  If not, then the collective does not have the ability to properly manage their acquired property. The only question remaining is if the collective has the right to force the mother to hold inside her and unwated fetus. A closehanger solves this problem and the collective is none the wiser other than an attempt gone wrong where a mother bleeds out when she finally arrives at an emergency room and is pronounced dead. Resources (quantifiable), time (quantifiable) , marginal value (quantifiable albeit difficult). Sounds like math. Sounds like laws. 

Fri, 07/25/2014 - 22:41 | 5006249 ekm1
ekm1's picture

Human laws of coercion are NOT natural phenomena which occur independently of our wishes.

 

The law of gravity is the law gravity, a natural phenomena, that cannot be changed by Obama's executive orders.

 

Whenever human will and decision making is involved, that is not a natural phenomenon, it's a law of coercion. 

Fri, 07/25/2014 - 23:02 | 5006265 alfaafla
alfaafla's picture

It's not natural to prefer more utility to less? The law of survival says the more utility we consume, the better off we are as a species. How we get there isn't straight forward, but managing resources more efficiently is a great starting point.  What do I mean by this? Your example of Obama with an executive order is predicated on a decision of war, injustice, what have you, and in the end the result of scarce resources. A moot point. Anyways, the point is that if us being better off is the result of the utility we consume, then the only thing that matters is devoting utility towards things that will ensure a longer run of survival. Russia, Ukraine, BRICS, Oil, is all just an attempt to diversify the eggs in the basket. It's natural, it mitigates risk, it ensures survival. It permits more potential utility to be consumed. 

Sat, 07/26/2014 - 03:46 | 5006619 Farqued Up
Farqued Up's picture

It all appears to more resemble a lion devouring a wildebeest than a Krugman diarrhea attack in theoretical bullshit. Most of us here are the eaten wildebeests, BTW.

Fri, 07/25/2014 - 22:58 | 5006295 Oldwood
Oldwood's picture

Everything that provides us more for less becomes increasingly acceptable, even if its ultimate ends are a disaster. Morals be damned. Abortion is about choice. yes. But it is primarily about convenience as their is infinite demand for new born infants, most willing to pay for the pregnancy. Convenience, be it through technology or simply a relaxation of morals and standards, rules all. And the fact that our future has been destroyed by the pulling forward all conceivable productivity, why should anyone care?

Fri, 07/25/2014 - 23:07 | 5006315 alfaafla
alfaafla's picture

If you're exclaiming a nihilstic outlook, you only need to look back at utility for purpose. 

Sat, 07/26/2014 - 10:16 | 5006918 rwe2late
rwe2late's picture

ekm1

you are exactly right.

Some others correctly understand that the economics of "capitalism" are not independent of property "rights", but then illogically conclude the economics are therefore not man-made.

Laws about taxes, pollution, inheritance, fraud, eminent domain, patents, incorporation, worker safety, discrimination, privacy, unionization, lobbying, lawsuits, water and drilling, and price-fixing are all about property.
One may claim they are only “regulations”, having nothing to do with “property rights”, but that does not make it so.
Without society’s rules and acceptance or enforcement, “property rights” exist only in the imagination.
Property essentially means exclusion. The greater the asserted monopoly of property, the greater the power of ownership.
Anything that can be 'commodified' can be 'owned' or privatized, whether resources, land, water, plants, animals, people, or even activities of work and play.
Enforcement is required for a globalized systemic expansion of property/corporate rights/control, and is a course purposefully taken by vetted leaders.

The so-called 'capitalist' paradigm is one of disconnected individuals separate and alienated from society and the natural world.
Thus, all emanates from the individual. Society is deemed unnecessary and adversarial, and the natural world becomes something equally worthless unless possessed and exploited by the individual. (i.e., individual "greed is good")

The man-made laws of property and concomitant privileges are claimed as scientific, in much the same way as once were the now discredited 'divine rights' of kings and nobility.

Tragically for humanity and the world, people and their institutions are so wedded to power and materialism that notions of freedom seem "quaint", and the lack of property "rights" in past cultures inconceivable. The course set appears, at best, for a long dark age.

Sat, 07/26/2014 - 14:00 | 5007501 ekm1
ekm1's picture

100% agree

90% of the law is about property rights, nothing else.

Sat, 07/26/2014 - 12:01 | 5007188 Comte d'herblay
Comte d'herblay's picture

Why all the thumbs down by a singularly cynical group I  can't figure.  

You are completely right.

Once a human gets involved, there are no laws, only as you say, decisions (boneheaded mostly.  Gay Marriage???) and free willy.

Sat, 07/26/2014 - 14:56 | 5007649 ekm1
ekm1's picture

thx

Sat, 07/26/2014 - 13:03 | 5007347 moneybots
moneybots's picture

"There is no such thing as 'economic law'."

 

100% of booms end in a bust.  100% of financial bubbles burst and deflate.  It has never been different this time.

Sat, 07/26/2014 - 13:18 | 5007369 Comte d'herblay
Comte d'herblay's picture

The Fallatio in your conclusion:

All financial booms do not end in a bust for the Boom manufacturers. Witness TARP, Maiden Lanes I and II, the Bail outs the TBto fuckin' fail banks, more fat with cash than ever.

IT's damned well different this time. You just need to broaden your vision.

Fri, 07/25/2014 - 21:17 | 5006100 Crawdaddy
Crawdaddy's picture

Conservation of angular momentum predicts the central planners are drilling through the ice rink and continuing down until they reach magma. Then they'll issue a press release explaining why this a positive indicator.

Fri, 07/25/2014 - 21:19 | 5006101 blindman
blindman's picture

http://www.youtube.com/watch?v=L3iwJKjw2iI
‘all the world is green’, tom waits
.

Fri, 07/25/2014 - 21:20 | 5006105 blindman
blindman's picture

all economics is bullshit including the laws.
why? what is the basic unit? there ya go ....
it is politics which is/always invariably becomes
bullshit.
just a thought.

Fri, 07/25/2014 - 21:31 | 5006136 Spastica Rex
Spastica Rex's picture

Bingo.

Economic "laws" are just a secular stand-in for religion.

Fri, 07/25/2014 - 23:06 | 5006313 Oldwood
Oldwood's picture

Its only bullshit when its laws are perverted and used to deceive. Supply and demand have always been with us.

Sat, 07/26/2014 - 08:58 | 5006829 tmosley
tmosley's picture

There are lots of basic units.  What is the basic unit of physics?

In economics there are units of goods, and units of currency, and units of individuals, who obey simple rules with a small degree of randomness, which disappears as noise when you look at the actions of large groups of people.

If there were no economic laws, then people would behave randomly.  Economics is the study of human action.  If human action isn't governed by rules (supply and demand, fair play, non-aggression, etc), then any prediction of the future would have equal validity, so long as it stayed within the laws of physics.  This would very, VERY quickly lead to the extinction of the human race.  The laws governing human behavior exist for a reason.

Sat, 07/26/2014 - 15:58 | 5007805 blindman
blindman's picture

what is the value of a tulip bulb?
.
if there were any real "laws" of economics man
would cease to practice in that field and would
invent a system where the laws only apply to
other people, not themselves, that is why i suggest
that all economics is bullshit. that may be the
first law of economics/politics.
.
it is more like a smoke screen to justify the
self serving power to control the imposed abstraction
on the average person of the day as designed by the
high priests of the field and only works where and when
the subjects are complicit in their own foolery. they
get an advantage but they defer the cost for their
shortsightedness.
.
so maybe economics is a psychological art practiced
badly forcing the populations into an incoherent state
of mind and being, thereby making them almost perfect
potential debt slaves investing and speculating in derivatives
of tulip bulbs?
.
beats me

Sat, 07/26/2014 - 20:48 | 5008421 tmosley
tmosley's picture

Ah, another handwaving argument.  A tulip bulb will have a great deal of value to people who don't have them.  But such bulbs can reproduce exponentially, so if their price is high enough, more supply will come online, until the price is driven down.  It remains profitable to produce more tulips.  I know, because the local university plants them every year, which means they have at least some value.

You are claiming that if there were laws of economics, people would find ways to make it so they didn't apply to them.  This is what governments do for a living.  But they can't.  All they can do is destroy capital.

Tulip mania was the first instance of a Western speculative bubble fueled by QE.  People will do the same things given the same conditions.  QE drives men mad, period.

Sat, 07/26/2014 - 17:50 | 5008048 blindman
blindman's picture

By Catherine Austin Fitts

A “control file” is a private record that contains secret information or pictures that are the basis of threatening and blackmailing a person. Perhaps the most famous historical example of control files were the “dirty pictures” that J. Edgar Hoover, former head of the FBI, was said to maintain.

A control file is an important tool of gathering and exercising power. Control files are often used to command loyalty and obedience from the people who manage government, sit in the courts, lead enterprises and direct financial transactions. Control files supercede both law and economics. They are an essential building block of “managed markets” – whether it is the bubbling of the mortgage markets, trillions in collateral fraud, or interest rates that fall to zero.

If “Mr. Global” (my nickname for the powers that be) has a control file chock full of dirty pictures and criminal liabilities then the subject of that file is likely to do whatever Mr. Global says. You and I can lobby a politician, file endless case law in support of our motion before a judge, or explain the prudent man rule and fiduciary principles to a pension manager until we are blue in the face. It will be to no avail. They will follow the direction of the person or organization that controls them through their control files.

From Mr. Global’s point of view, control files are economic. For example, take the $4 trillion that disappeared from the US government from fiscal 1998-2002. Let’s say you need 100 people in the payment and systems areas in the US government senior service and their accounting, systems and banking firms to engineer this move and the related agency securities fraud. Which is cheaper? Arranging control files and a few “accidents” or cutting them in for a % of the profits? ..caf
.
https://solari.com/blog/control-files/

Fri, 07/25/2014 - 21:25 | 5006123 stant
stant's picture

Grishams law. Bitchez

Fri, 07/25/2014 - 21:43 | 5006156 Money Squid
Money Squid's picture

There are laws of nature and laws of economics. Laws of economics are optional.

Fri, 07/25/2014 - 21:44 | 5006157 wardawg12
wardawg12's picture

No economic laws? How about this one, Money doesn't grow on trees. How about, You can't get something for nothing. How about, The world doesn't owe you a living. THOSE are immutable economic laws. Ain't no way to game those laws forever.

Fri, 07/25/2014 - 22:27 | 5006234 deflator
deflator's picture

no squared circles? no free lunches? what? say it isn't so...

Sat, 07/26/2014 - 00:48 | 5006472 AlaricBalth
AlaricBalth's picture

You can't get something for nothing is the simplified definition of the First Law of Thermodynamics. And it has been discovered that real money (gold) does grow on Eucalyptus tress in Western Australia.

"A group of researchers from the Commonwealth Scientific and Industrial Research Organisation (CSIRO) made the discovery recently and published their findings in the journal Nature Communications. They say that the roots of the trees act like a ‘hydraulic pump’, taking up tiny ions of gold tens of metres within the soil below as they gather water. Particularly in drought conditions roots can reach up to 35 metres deep into the soil."

http://felixonline.co.uk/science/3975/apparently-money-does-grow-on-trees/

Sun, 07/27/2014 - 05:28 | 5009150 Comte d'herblay
Comte d'herblay's picture

grr....

FAIL!

 

Sun, 07/27/2014 - 05:27 | 5009151 Comte d'herblay
Comte d'herblay's picture

Money doesn't grow...... yada:    False     It is created far faster by the FED.  And given in the quadrillions to failed, corrupt, sociopaths on Wall Street

You can't get something.....       False     See directly above

The world doesn't owe....yada     False     see directly above

Game them???  Christ, man where have you been to think as you do???  

The FED over the last 5 years going on 6 has created more money than the entire world economy sees in circulation in 2005.  

And he did it with the numerical keypad on the keyboard, no different than the one you are using now; he did it in ten seconds.

You and those who agree with you have no fucking clue what is happening in the real world of the Jewish Mafia on Wall Street.

FAIL!

 

Fri, 07/25/2014 - 21:45 | 5006159 blindman
blindman's picture

near full spectrum ...
information, finance, violence,
brute force, legislative, education,
gratification ........
first last , last first.
come on in, the water is fine.
.
invitation to the blues.
.
Ray Price Roger Miller Invitation to the Blues
http://www.youtube.com/watch?v=OSWjD4dAKH4
.
waits ....
http://www.youtube.com/watch?v=Ujn4YTrdBNI

http://archive.slobodnyvysielac.sk/infovojna%20-%202014-07-22%20roberts.mp3
PCR interviewed by Norbert Lichtner — Ukraine and Israel
.
Guns and Butter
"The Post World War II System of Hidden Finance" with Dr. Joseph Farrell
The National Security Finance Intelligence Military Industrial Complex
http://www.kpfa.org/archive/id/104979
.
ukrainian, nazi, river boat queen.
.
Ike & Tina Turner - Proud Mary
http://www.youtube.com/watch?v=hzQnPz6TpGc

Television, "See No Evil"
http://www.youtube.com/watch?v=-Fj_EzPAXfU
.

Fri, 07/25/2014 - 21:46 | 5006160 Money Squid
Money Squid's picture

The law of pornography - "There are certain things I will not do, until my popularity begins to fade and I need more money."

Fri, 07/25/2014 - 21:49 | 5006165 medium giraffe
medium giraffe's picture

Fuck off, 'laws'.  How 'bout I come round your house and smash all your fucking windows in? 

Fri, 07/25/2014 - 21:55 | 5006179 Reaper
Reaper's picture

The error is that economics is a science with laws. Economics is mental mechanism to explain the natural world. The reality is that we are bound by what exists and what we produce. Economic perceptions might cause changes in behavior, but unless those changes produce more to divide up, we will have no more to divide up. Can we fool the Little Red Hen to plant a crop again and repeat the past? Maybe,for one more year, but it'll end. Nature always has and will introduce the unknown. If 50 million of us plant corn and a rare frost occurs, the "economic law" fails.

The reality is have only what nature provides and what we produce and any manipulations by a fake science of economics or government actions will fail.

Economic law and science is the alchemy of the 20th and 21st centuries.

Fri, 07/25/2014 - 22:46 | 5006261 Emergency Ward
Emergency Ward's picture

Here's what passes for economics these days:

 

IMF Director relies on numerology (777).

Nobel Prize economist claims a space alien invasion will stimulate the economy.

Federal Reserve witch doctors worshiping "animal spirits".

The new alchemy is the endless "minting" of digital money that gets converted into a Cadillac Escalade that sits on an overstock parking lot.

Fri, 07/25/2014 - 21:59 | 5006188 blindman
blindman's picture

other peoples time, respect it
or die.

Fri, 07/25/2014 - 22:04 | 5006195 Seasmoke
Seasmoke's picture

Moral hazard has a way of always fucking up man made laws. 2008 moral hazard made economic laws obsolete.

Fri, 07/25/2014 - 22:07 | 5006202 erg
erg's picture

Worry not, they'll eventually cover themselves in a fine, pissy mist of their own backspray.

Fri, 07/25/2014 - 22:09 | 5006205 deflator
deflator's picture

So, economics is a science? I don't think economics is a science similar to mathematics. It is a science in the way a con artist or pick pocket sizes up it's mark.

Sat, 07/26/2014 - 00:57 | 5006484 Radical Marijuana
Radical Marijuana's picture

YES!

Economics is a science the way that warfare is a science!

Sat, 07/26/2014 - 09:11 | 5006840 tmosley
tmosley's picture

Real economics is a science.  It's just that economics, the study of human action, is unique in that the subjects change as you study them, making mathematical descriptions difficult at times, as they must include self reference to be accurate.  That is hard to do, and if you were to do it properly, you will have invented an oracle machine (https://en.wikipedia.org/wiki/Oracle_machine), a strong AI which would render human effort meaningless.  If you can model human action in a perfect manner, you can replicate it without human intervention, or with as much human intervention as each individual human values (ie you don't have to play a violin to get music, but if you enjoy the act of playing, you still can).

Sadly, an arbitrarily high percentage of economists fail to understand this.  If they did, we would have a lot more people working on AI research.

Sat, 07/26/2014 - 12:13 | 5007220 rwe2late
rwe2late's picture

 It is oftimes forgotten or ignored that "economics"

is the modern term of convenience for what used to be

classified (more accurately I may add) as "political economy".

Fri, 07/25/2014 - 22:23 | 5006223 I Write Code
I Write Code's picture

There are laws, but sometimes they're not what you think they are.

And sometimes you just gotta do the crime and then do the time.

If you get caught and convicted and the prisons aren't overcrowded so you get out after 3 hours with a million dollars in freshly-printed fiat to help you rehabilitate yourself.

Fri, 07/25/2014 - 22:28 | 5006238 Cabreado
Cabreado's picture

"Economic Laws Are Not Optional"

What "economic laws" are you referring to?

With sincere effort, tried to find, but gave up.

What a mess.

Sat, 07/26/2014 - 10:50 | 5006995 shovelhead
shovelhead's picture

Economics:

The observation of surplus.

Why?

Because consumption is a dead end, innit?

Fri, 07/25/2014 - 22:30 | 5006242 kchrisc
kchrisc's picture

There is one over riding rule of economics, Say's Law: Production produces its own demand (trade). I.e. one can only consume another's production by way of trade of his production.

By extension, one can only consume what one has produced even if it is in another form by way of trade.

If one does not produce, but consumes via theft, he can only consume what he denies others the ability to consume--a zero-sum "game."

If one is able to embed his theft in the system of trade itself, then he is able to convert the whole system to a zero-sum "game," with him as the ever victor. However, such a system has a negative feedback loop that disincentivizes production for the producers, causing diminishing returns upon ones theft and maintenance thereof.

Eventually a zero-sum system of theft collapses.

 

"My guillotine produces heads and a body of work."

Fri, 07/25/2014 - 22:54 | 5006247 deflator
deflator's picture

 Our global economic model, led by the U.S. says that there is no such thing as a zero sum game because energy is infinite and every tomorrow will always produce more of everything. Your labor, which is energy, will be marginalized while their money that they can create out of thin air will always be "king".

 

 If you believe the past 150 years of persistent economic growth which is an anomoly in contrast to the rest of human civilization is a result of our greater understanding of economics ala Krugman rather than a result of the surplusses of energy and technology that consumes it, crude oil, natural gas and coal then you can safely bet on the status quo. Clearly, judging the demand for debt extrapolated indefinitely into the future, the Earth(as Kunstler would say) has a creamy nougat center of oil.

Sat, 07/26/2014 - 10:57 | 5007020 shovelhead
shovelhead's picture

No growth in commerce before coal/petroleum?

You sure about that?

Sat, 07/26/2014 - 00:03 | 5006421 RocketmanBob
RocketmanBob's picture

Perhaps immutable might have been a more accure choice of word than inexorable...

But either way, the laws of economics are very much like thermodynamics in that they may be violated, locally, for a short time; at a greater cost to the overall system.  It's kind of like the result of the Keynesian pump the author alludes to.

Sat, 07/26/2014 - 01:07 | 5006461 Radical Marijuana
Radical Marijuana's picture

An article like the one above tickles my macabre sense of humour with its attempts to make some superficial sense out of the situation, which barely get remotely close to comprehending the relationships between human laws and natural laws. However, I forgive that, since our whole society is based on deliberately NOT doing that, as much as possible.

The ONLY relationship between human laws and natural laws is the ability to back up lies with violence. There is no problem with understanding human systems as manifestations of general energy systems, EXCEPT that the best descriptions of that are the methods and principles of organized crime, which means that those who are the best at being dishonest, and backing that up with violence, actually control our civilization. Any attempts to present more radical truth run into the problems that, since human beings operate through systems of organized lies, operating robberies, those who are the most successful at doing that were also the ones who were most able to dominate civilization, with their biggest bullies' bullshit view of the world.

To be "successful" in the established systems means that one accumulates large numbers of social tokens of power and prestige, which were all created out of nothing but enforced frauds, yet which nevertheless are the symbolic means through which the real world is regulated, since everything is based on ENFORCED FRAUDS, and therefore, the most socially successful people are those who most participated inside of those systems of ENFORCED FRAUDS.

The ability to back up lies with violence is the foundation of all of the rest of the superstructure of civilization, which is why our political economy operates through fundamentally fraudulent financial accounting systems, which do their best to deliberately deny and ignore the radical truth about themselves! The tragic trajectory of civilization based on successfully enforced frauds is its paradox of final failure from too much of that kind of success, for too long, driving the entire civilization through to become completely crazy! WELCOME TO THE RISE AND FALL OF CIVILIZATIONS: WHAT MAKES THEM LATER DESTROYS THEM!

This kind of article, and most of the comments above made upon it, are surreal half-way houses, which do not go through a thorough enough paradigm shift to comprehend that, of course, human realities are consistent with natural laws, however, that means that human realities necessarily are always organized lies operating robberies. Furthermore, those social facts are presented through the maximum possible deceits and frauds, in order to become the most socially successful, which drove runaway paradoxes throughout human history. The supreme irony is that is necessarily the way that the world must be perceived by human beings!

There is NO doubt that "economic laws are not optional!" However, economics is a science like warfare is a science. Social success in warfare was based on backing up deceits with destruction. Social success in economics is based on backing up frauds with force. There continues to be a correspondence between the laws of nature and the laws of man, as long as one allows for those basic social facts as central to the whole situation. The kind of article above only tangentially touches upon some of those points, but does not present deeper and more thorough understanding of that situation.

This kind of article does not face any of the basics, like that the production of destruction controls production, and all the related paradoxes that flow from society being controlled by the biggest bullies, who have promoted their bullshit social stories to become dominate. All private property is based on backing up claims with coercion, while the most abstract form of that is that money is measurement backed by murder ... yet, of course, those doing that the most were necessarily the ones who were the best at lying about that, and their ability to enforce their frauds then enables them to become the most wealthy and powerful people, which drives a social system in which their outrageous frauds are treated as if they were valid. Their egregious absurdities are regarded as gospel truth, within their advancing state religions, which are enforced frauds, that systematically reward those who agree with their huge lies, while they punish those who do not agree with those huge lies. Generation after generation, that process creates a Bizarro Mirror World, where the radical truth and the social stories become proportionately perfect backward mirror images of each other.

Of course, articles like this, and practically every other featured article on Zero Hedge, as well as most of the comments upon those articles, continue to struggle through using the basic dualities that are practically innate to the ways that human beings think, and are certainly deeply present throughout every natural language and traditional culture. Such articles are relatively good analysis, based on relatively useful dichotomies, then followed by bullshit "solutions," which assert false fundamental dichotomies, and their related impossible ideals. OVER AND OVER AGAIN, THAT IS THE PATTERN THROUGHOUT ALMOST ALL ZERO HEDGE ARTICLES AND COMMENTS!

In my view, everything that this article above stated was correct, on its own level. However, that is like a skipping stone bouncing across the surface of a body of water, without plumbing the depths. The superficial analysis reveals that the government has become the biggest form of organized crime, controlled by the best organized gangs of criminals, whose policies are running amok! The superficial suggestions of "solutions" are based on impossible ideals that somehow we could have a government which was not based upon the history of organized crime, which naturally resulted in the best organized gangs of criminals capturing control over that government.

In the end, this kind of article is just another wrinkle in the fabric of the time-space continuum. There are some superficially correct perceptions presented about the ways in which the established systems are operating on the basis shorter terms sequences of enforced frauds, which accumulate worse and worse longer term consequences. However, the author does not go THROUGH the looking glass of that Bizarro Mirror World.

Sat, 07/26/2014 - 02:00 | 5006546 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Anal hoarding behaviour is directly correlated to personality and psychosexual development as well as obsessive compulsive behaviour.

Bankster criminals merely deviate from the accepted sociological norms of our society to hoard more of what they anxiously need and want via

classical and operant conditioning from the time of early character formation. These criminal characters you are refering to actually started out in childhood with the character traits you would assign to criminality. Their sociopathic tendencies towards others, control, and money lends to their inclination towards criminality and financial deviance. Their persona essentially leads these individuals into the career paths that allow them to control wealth and clients wealth

thereby allowing the financial deviant power over clients and their money. Power hungry control freaks like controlling others and their money even if that means doing so in unethical ways. Risk taking behaviour attracts the risky types and dangerous sociopathic type personalities. Developmentally, these criminals were conditioned via learning to seek the reinforcers that give them power and status in adulthood. Controlling other people's money allows these personalities means to control the lives of clients through a false perception of 'honesty' that is hedged against via further bets on different levels of the markets these people play. It's a mugs game

for mugs.

Sat, 07/26/2014 - 16:59 | 5007932 Radical Marijuana
Radical Marijuana's picture

Master Of Universe, I always attempt to look past the psychology, towards the environmental reinforcements, that drove human ecology to select FOR those kinds of personalities. The chronic political problems inherent in the nature of life drive there to be selection pressures, which have tended to select for militarism, and the monetary system based on the sort of society that success through warfare originally built. The dominant personalities are adapted to those realities.

Alternative, better psychologies could not work unless they were integrated through better death controls, which is the prime paradox for why we have not seen that happen, but rather, there has been runaway exponential growth of the problems, due to successfully enforced frauds creating a civilization which maintains attitudes of evil deliberate ignorance towards the future. Those current psychoses enables people to consume the future today, by creating money out of nothing as debts. The entire civilization operates on the basis of the maximized short-term benefits from enforced frauds. The dominant psychologies are those which worked inside of that system.

The "irony" is that successfully controlling other people with lies backed by violence does not lead to any good outcomes in the end, since eventually everything goes out of control. I can not imagine any other possible ways that the systems of enforced frauds could be corrected than by their consequences going out of control of those systems, because otherwise, those systems continue to control civilization by being able to back up lies with violence.

I quote a cliche about forest fire management, which applies to how the monetary system has been managed, in more and more obvious ways since the financial crises of 2008:

“We made a decision decades ago that fire had only negative effects on the forests and we valued the forests for economic reasons … so we made a huge effort to suppress fires and we have been very successful.” ... But the success of firefighting created more risk. Without regular fires, fuel built up on the forest floor. “When there’s high frequency of fires, every 10, 20, even 40 years, that means in a human lifetime there would have been three or four fires repeated in the forest around them. And those fires would have burned off leaf litter and needles and fine fuels that accumulate on the ground … But in absence of those fires the fuels accumulate and … you get the conditions for a much more severe fire, ... And so there’s the big paradox – by trying to protect ourselves from surface fires we’ve created conditions … for big severe fires."

source:

http://www.theglobeandmail.com/news/british-columbia/forest-fires-climat...

When fires get going in a forest where fuel has been stockpiled, they can quickly get out of control, and the real ways that the political economy is operated as enforced frauds, which attempt to stabilize themselves with even more enforced frauds, is building and building up the potential for things to go utterly out of control, as extremely severe social storms. HOWEVER, THE PERSONALITIES THAT DOMINATE THOSE SYSTEMS ARE TAKING THOSE RISKS, WHILE THE VAST MAJORITY OF OTHER PEOPLE HAVE ADAPTED BY BECOMING EVEN MORE DELIBERATELY IGNORANT OF THAT SITUATION.

Sun, 07/27/2014 - 22:59 | 5011392 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

I get the forest fire analogy, obviously. The fuel for the economic forest fire is the dark pool derivative universe of $1.4 quadrillion that Yellen cannot inflate fast enough to keep it from imploding due to lack of bubble blowing and bubble blowers inflating the bubble. The faux leadership that has assumed the helm of the good ship Capitalism USA

does not know how to sail and has not set sail since 2008. The Hegelian spiral down to a de-Americanized petro-dollar with BRICS

nations developing trade apart from America will lead us all down the garden path to revolution or mass genocide by governance. Either way we will see the destruction of the architecture that the criminals have built over the decades of corruption we have witnessed so far in terms of Investment Banking and the universe of crime they built with derivatives contracts. When this finally blows we will no longer have to worry about institutionalized criminality because the institutions will be overthrown by the masses not unlike what we witnessed in Cuba during Fidel Castro's

takeover. The same type of revolution awaits us here in North America when the dark pool derivatives universe finally blows.

That amount of leverage cannot be sustained by any genius in mathematics that this world has ever produced. Controlling the dark pool derivatives universe implosion will be empirically impossible to say the least. We will continue on this Hegelian spiral until she blows. Clearly, smart people cannot fix stupid no matter how hard we try. Since 2008 nothing constructive has manifested IMHO. And the only thing keeping this Titanic afloat is political and economic theater, show trials, and wars.

p.s. I have to smoke a big reefer now just thinking about it.

Sat, 07/26/2014 - 15:09 | 5007692 luftmensch
luftmensch's picture

That must be some good weed in your stash radical m!  Seriously though, good points.  Not all societies are based on laws as much as the current Western European / JudeoChristian model is.  Many are based more on relationships and guanxi.

You imply that all economic / govt systems are enforced theft/frauds.  I would take it a step further and say, whatever the system, it's ultimate result tends to be based on the true intention (ulterior motives) of the creators (rather than any words).  Of course, in many but perhaps not all manifestations, this will be a form of dominance.

Perhaps the best we can hope for, is a system in which the creators/dominators take a "reasonable" amount of the wealth for the "house".

For example, many countries have oligarchs, but the living conditions of "the people", the ability of their government to be functional, the ratio of resources left over after the Oligarchs take their slices, can vary greatly.  

To gain a more altruistic/balanced system may ultimately require moral training from a young age ("teach your children well").

 

Sat, 07/26/2014 - 17:12 | 5007958 Radical Marijuana
Radical Marijuana's picture

For sure, luftmensch, basic attitudes are reinforced in the first few years of life in ways which are fundamental to the rest of that life! Unfortunately, the was also understood by those who dominated our society, as expressed through various foundations that they endowed to take control of the public school systems, to drive those to do the worst possible things, because the ruling classes were in a perpetual war against the consciousness of those that they rule over.

Tragically, that has been so successful, for so long, that between the schools and mass media brainwashing people to believe in the biggest bullies' bullshit, there are practically no reasonable ways to doubt that will not continue to automatically get worse, faster. I doubt that even 10% of the population is able to be rational enough to understand the real economic system, while most of those are personally adapting to take advantage of the systems of enforced frauds, rather than attempting to change those to become any better systems.

It is NOT possible to imagine the established systems not continuing to engage in the maximum LIES BY OMISSION, about the Money As Debt system. While it would not be hard for children to actually understand that, they would then understand that they were being totally screwed by the political system that they were born into!

The idea that private banks are allowed to make the public "money" supply out of nothing as debts is NOT a difficult to idea to understand, as long as one is willing and able to understand that means the government has become the biggest form of organized crime, controlled by best organized gang of criminals. Young people could understand how unfair that was, and therefore, they are never told!

Sat, 07/26/2014 - 00:51 | 5006475 Ariadne
Ariadne's picture

Your model presumes nonparticipants eat shit with the perps. If this were true none of us would even be here now. Some Heads Are Gonna Roll

Sat, 07/26/2014 - 01:22 | 5006513 hedgiex
hedgiex's picture

There are no economic laws just economic ideologies. We have a non consenual economic ideology that upholds the 1% against the 99% thus undermining the foundations of social justice, democracy, value of the individual and the free markets AND has corrupted all institutions that uphold the said foundations/principles.

End of Pax America but not end of the World because other communities/nations may just get the chemistry right starting with no top down ideology but just bottom up consensual support of common core values and use economic tools to engender them.

Those emerging core values from elsehwere may be mutated strains from what shall preserve their humanities but certainly not what are presently defined by America who has lost its moral authority as a guardian of what is "good" for the survival of individuals in communities/nations.

Sat, 07/26/2014 - 01:47 | 5006532 Kina
Kina's picture

Germany will never ever get its gold back....the US has sold it long ago abd they dont care. The US acts as a nation that no laws apply to, only to whom they wish to arbitrarily invent and apply a law of their own choosing.

 

The US is in very much desperation mode, it has no patience or desire for subtlety and diplomacy. ..only demands threats  on ally  and foe alike. .The USA sees all countries as their tool. The demand and order countries.

Germany will join with the BRICS in time as the only viable option...as the US clings to the vestiges of a reserve currency that funds  it's military 

Sat, 07/26/2014 - 03:34 | 5006605 Geronimo66
Geronimo66's picture

Economic laws are not optional. They are like the laws of physics - inexorable!

Well make it: Economic laws are not optional. They are NOT like the laws of physics - inexorable!

Einstein has made laws of physics.

Economic is just a framework a general idea/concept.

Right Emanuel Derman?

 

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