Interest rates, Money, Stalled Recovery and the Fed

The response of the FOMC and the Fed Board of Governors can be heard now, "What do you expect from us, we can only respond to conditions."

Well, yes. (In retrospect again.) The chosen road at journey's start establishes momentum, only goes one way, and there are no "turnarounds."

We're trapped on the one way street and any attempt to reverse ourselves will be met with shredded tires and ruined transportation.

The Fed is caught in a trap of their own making. The ingredients are ZLB while trying to induce an artificial inflation with the misguided presumption that somehow real inflation will sneak in and put demand from bankrupted people into the markets and all will start up and the tooth fairy will have won out once again. No sir. With the two large oriental nations doing all in their power to cheapen their products, the cross border markets dissuaded from patronizing US firms fueled by high priced dollars, the "competitive instinct" which is in short supply lately - if it ever has been abundant(?) - has been pushed aside and if there is to be a recovery it will be in another nation, under different conditions than have been imposed here in the good old USoA. This stagnation will drag on for a generation or more; that much should be obvious now.

In the meantime, the dollar will go where our market competitors abroad wish, and the statisticians will earn their keep the hard way by cookin' the books to reassure the pressured - once but no more - middle and lower classes that we're on the way out, as soon as we leave the traps we've laid behind. It must be frustrating for the folks at the Fed to reap what they've sown. Fearful of aggravating the enormous debt incurred by the QEs and bail-outs, suggestions of the replacement bail-ins and teases with quarter percent increases do not lead to solid ground.

They should take a look at the larger picture. . . Money, for instance! Forget the old time vision of money's classical three functions; it has only one function now - as a score keeper! Those closest to the flow of money or its creation want no more than to keep the stream close at hand and within their control so they can dip into the stream at will and extract without providing any service in return. Thus we will not have a recovery of jobs, market prominence from production sources we no longer control and will continue to subsist by way of selling off what remains of our store of assets. We'll continue to sell until what remains is worthless.

The stock market continues to rise while demand as measured by retail sales fall. Market sales are financed by what? Old money? Are brokerages which the Fed has relabeled as banks, now with the capabilities of issuing money, busy putting new money out to pay off the traders - not investors, they are traders only! - on a daily or hourly basis. And, are the traders busy recirculating the money to stimulate a real demand, a real resuscitation, a real recovery through new markets, increased production, rising wages, in short, a healthy recovering economy? Palatial residences, yachts the size of ocean going ships, and private airplanes do not produce wealth, they absorb it; they are not marketable assets and although they consume money initially they then lie fallow contributing nothing to GDP. It is a fact and economists have noted this very visible fact.

Money! Money and Capital - the illusive economic topic. It doesn't lend itself easily to equations and theory, therefore it is dumped along the highway leading to enlightenment, no matter how essential it is to understanding our system. If we ask how much capital is needed to keep the system in self-supporting mode, what is the answer? Silence! To break the silence we get apologies: not enough data, not collected, not rendered useful, no way to unify the various unrelated ways industries employ capital. Too many variables; too much difference in time constraints; so instead of searching out answers to the puzzles - which would require many heads working together, the trade opts for other investigations where individuals could work uninterrupted by reality and gain recognition - for solving minor problems and clarifying minor mis-statements, other - easier - studies reduced to static and convenient terms which are often theoretical,. therefore not applicable to real life problems.

The Money masters have two convenient excuses: In looking back through history, we've never had anything like this happen before; and we cannot be dictated to by elected officials lacking training or experience with such complex issues with political leanings. Independence over all! And then they are suspected of turning to banks and other industries who have led us into recession after recession and ask if it's acceptable to take one or another course of action.

Meanwhile China and Japan are undermining not only our currency but our industries - with the help of our commercial wizards; the EU has political problems underlying their currency and along with industrial problems; economists are renewing questions about the relevance stock markets bear toward economies; and, the Fed is being tacitly accused of cosying up to banks and compromising their mandate to regulate and supervise. How can they not have mixed emotions at the FOMC when the subject of interest rates is brought up? Most of the problems have money issues underlying the difficulties and conflicts and that falls within the responsibility of the Fed, does it not?

The beginning of the new millennium has launched us into a new money world. We've poured batches of money - or promises of money in the form of credit - into gaping voids in the system - hoping against hope that the system absorbs the offering and rights itself. The expectation that the false inflation will not cajole the system into recovery in the aftermath has been ignored - more in the line of thought of "What's done is done and can't be undone." The loose money has passed into banks through the front door and remained there. When standard expectations are not met, Keynesianism is lauded as being acceptable (meaning fiscal debt has no limit as long as the ratio of debt to GDP remains constant) and all common sense is parked at the door. For answers to inquiries about the whereabouts of the missing funds, look to the rosters of newly minted billionaires.

In all, newly minted money must by controlled; professional money-handlers need closer supervision; fewer institutions should be authorized to issue money or issue any money substitutes remotely related to money or requiring money as collateral; and the function and role of capital should be studied and defined and the resulting data and understanding whether enforced to one standard or fifty should be positively keyed to the system to control volatility and balance. If the present staff of economists cannot provide answers or means to this end, hire some of the players who understand the nature and function of money so well they can do with it as they please. As the situation stands at this time, we have nothing but confusion surrounding the total stock of money in circulation and who has issued the largest amount to serve what purpose and how many of them are truly legitimate.

The only reason we have not attempted any of these controls? No, we don't know how to define them; but, we are not even attempting to learn! One sure source for that are the accounting sheets. All that is needed is require the industries who know full well the functions of capital from the smallest requirement to the largest to provide it to federal economists. The answers are in there for the asking, and we would be able to adjust the use of money and its substitutes to balance operating economies once and for all. But, in any call for the data, the industries would wail to high Heaven. Proprietary secrets are involved! - The authorities (especially the IRS) would learn just how any industry makes its profit; secrets of the temple that should not be released for public consumption. Or, if the secrets are already in the hands of federal authorities through tax returns, why can they not be sterilized, neutralized and rendered unidentifiable with any firm or industry and put to use to solve the volatility and recurrent imbalances as well as the nature and functions of capital to help control from that aspect?

In all likelihood, as we've restated assertions from older analyses, no one really wants stability - not banks, not entrepreneurs, not business men in charge of production facilities. Too much plain vanilla and not enough opportunity to "get ahead" or prove our competitive spirit still works. Got to acquire more tally sheets - e.g., money or vouchers of some sort which may be in fashion at the time.

Why put an end to the thrills?

Wonders of Alchemy

The cardinal sin of modern governments is printing money whenever they please. It seems advanced thinkers in 17th century England also thought creating money from nothing was like alchemy. They did not mean it as a diss, though. They thought alchemy was great. They wanted to wreak alchemical wonders on the money supply, and if they hadn't succeeded, there'd be no modern world.

What to do, then, about the absolute limit on the amount of gold or silver or other valuable stuff in the world? The innovator's first notion of a solution was obvious: make more gold and silver, by alchemy.
Turning lead into gold didn't work out. So it was on to Plan B: create money based on trust, rather than cold, hard metal. Metaphorical alchemy replaced the literal kind, and a good bank, would be capable of multiplying the stock of the Nation, for as much as concernes trading in infinitum: in breife, it is the Elixir or Philosophers Stone.
Credit replaced alchemical voodoo as a means to create more currency without having to go mine gold.

Our politicians still believe that they could turn lead into gold. But, hey, prosperity without work is a dream.

Along with alchemy, many other ideas from the scientific revolution were essential to the birth of the modern economy. For example, when money is based on credit rather than stuff, people need to be sure they can trust the currency. The guarantees devised to solve that problem, were much the same as the guarantees scientists offered about the knowledge they were turning up in their experiments.
As scientists explained each step of their experiments, so banks would issue honest reports of their dealings, letting the public make its judgement based on shared facts.
As scientists were expected to behave with aristocratic honor and integrity, so banks would be entrusted only to a virtuous elite.
As scientists sought out fraud and punished it, so the banking system would root out counterfeiters and punish them even more severly (generally by hanging).
This why, 17th century intellectuals did not find it all strange that Isaac Newton should take time away from his scientific pursuits to become the Warden of the Royal Mint.

I found fascinating the following post by the economic historian Carl Wennerlind.

When Corruption Unravels

The winds of Fate have changed direction and so comes the end for an awful lot of unstable things propped up for a decade or longer. It's getting interesting to read articles and extract the truth piece out of the BS and then guess the impact. Anybody else notice that both Clinton and Cruz are no longer spotlighted? While the move to trump Trump seems to be the target of deeper pockets everywhere, his game is a very clever one. History may very well show that man as a patriot who did what no one else could... inflict a fatal blow to corrupt control and drive it to ruin. We should be careful what we wish for now... while change is good, changing is often an Olympic level fete not for the faint or weak heart.

There really isn't much left of Japan and China is now shuttering dead things it previously claimed were vital. The Technology Revolution is so toxic from corruption that it will soon begin it's "opt out" era where people simply do not go online because it cannot be trusted. Is there really anything left of Europe at all? When all the hipsters move to Canada will it thrive or just sit there with all it's bandwidth manipulated by deadbeat texting? Is Mexico the new manufacturing mecca or is Africa? Anybody hear a peep out of Australia or South America? Neither continent has a pulse.

We know this... from the local bank on up to the IMF, financial tyrannical control and manipulation has killed economies everywhere on Earth. There is no singular place thriving, but a few are getting by-- fragile based on a closed or fixed bubble economy that is mainly self-serving. Stock and bond markets along with bastion commodities are fully toxic by fake-printed money that can NEVER enter Main Streets or it will dilute what's left of them. A history lesson worth rereading is the impact of fiat money in France that replaced diluted fiat money hoarded in stocks after strangling Main Street and leaving the majority destitute. It brought on a Revolution. As crazy as it may seem... actually dissolving all entities globe-wide (fully kill globalization) and the law firms behind them would isolate the fiat money and give us the chance to evaporate it. Think about it... the actual economies in the world are subterranean to the mainstream fiat funded one that has zero ability to sustain on it's own. Collapsing that one leaves small unique hardened enterprise-based economies that would not tolerate or trust huge infusions of capital. In other words, big money would stand in line to buy "one" like anyone else without any way to control that which is already controlled for survival sake.

The damage is done. The best we can do is isolate wealth and hold it to the destitution level it condemned the rest of us to... until it dies, and suture it off so it doesn't spread and infect the healthy economies born out of sub-economic disciplines in play now.

When Corruption Unravels- Part II

The maine-iac governor of Maine has a hissy-fit and refuses to swear-in the new fairly-elected Democratic Senator.

A new poll shows that even if the GOP held a brokered convention, Trump would still win by a 2.5:1 vote ratio.

The Right are reversing their willingness to interview Merrick Garland as a new Supreme Court judge but in doing so all states are now bracing for a 100% kickback against stonewall Republicans obstructing due process in America. We actually CAN see a complete sweep out of GOP in political offices.

State governors are on the ropes and dodging punches but losing steam. Michigan's Rick Snyder is doing some serious dancing as more than just Flint has water purity issues and now that he has pledged and swore to "fix the problem", the problem is-- he needs revenues to do it. FACTS: 1 in 4 children in Michigan remain reliant on Food Stamps and he just sent hundreds of thousands into the streets by curtailing State Assistance. A lot of those folks live in Flint. 1 in 6 adults here remain reliant on Federal Assistance. A recent analysis of dangerous cities say Michigan now has three of them... Flint, Saginaw and Detroit. Since winning his governor seat, Snyder's entire investment has been to the western side of the state but literally-- no area there can remain sustainable without fund infusions. When he diverts state monies to fix water lines, he bankrupts GOP business platforms and makes a tech train wreck. Snyder has been aggressive in granting H1b visas mainly to technology jobs that do not seem to benefit our economy at all.

Second Quarter America--- retail is in some serious trouble. Stocks are nearing record levels again but towers are wallowing and the general Public is beyond frustrated and angry with politics, bad banks, bad businesses and the Federal Reserve manipulation. I'm going to task readers to review 1905 America. In circumstances that very much mirror what we have in play today... seemingly, pawn brokers as loan sharks appeared to have complete control over the average consumer but then, the fully suppressed consumer stopped paying (tap-out). The cash flow collapse came back on the banks funding the corrupt sharks who defaulted on those arrangements. The loan sharks ran to courts for bankruptcy protection which in turn sent the banks crying to Washington for bail-outs. If we fast forward that to now, the "banks" are all the G Nations and the sharks are GOP (post Maturity Arc money hoarders). Nations will be forced to collapse Central Banks when consumers broadly default.

I am surprised the eggheads engaged in the IMF aren't reading up on the potential repeat of that history. Unless billions suddenly regain income streams, revenues to all sorts of pariah dry up. You can't bail fully dead things and expect to re-animate them when doing so changes no part of the broader crisis.

Can Government operate outside of corruption?

In response to the repeat in history and the challenge issued to IMF in re the 1905 collapse, followed by the even more devastating 1907, which, in turn brought life to the Fed, which then did nothing for 20 years, until . . .

Repeat of same pattern of development. A friend suggested the new millennium brought on a new outlook to the Fed. Perhaps, but then that “new outlook” crops up each time their responsibilities are bungled - which may be several times a decade. It’s becoming so embarrassing, their recent retreat back behind the opaque protective shield is explained. They did little better in the transparent environment.


Economists at IMF drink the same water used by the rest of the trade. Response to your last point is found in answer #1 in their list of standard replies: “This time is different!” From top to bottom it is different: different corruption; different finances; but, most essential - different faces!

The only appeal they invoke; “We never encountered anything as destructive and since our arithmetic and impeccable logic solved all the problems of generations past, any and all remaining flaws have been swept under the rug, forgotten.”


That the cast and crew might be operating, fueled by pure innocence, is too unlikely. And, where is that standby replacement corps which can handle the mess left behind by the conspirators?

Modern day Alchemists

If anything, we have more alchemists - those in search of something for nothing or rewards beyond their due - than those in the seventeenth century. In effect, they are working to destroy the society that harbors them.

Any keepers of the laws or morals of a nation who cannot see the crime or immorality in the behavior of the perpetually angry or incurably predatory, over-ambitious social criminals - Greedy is the ultimate label - should be drummed out of office on the basis of misfeasance or betraying the fiduciary responsibility entrusted to them through their office or title.

Considering the growth in population in sheer numbers alone since the seventeenth century, we should be able to judge the danger of magnified effect of the antisocial behavior even if the percentage remains the same.

We've got to get people into office who have a social conscience. Why is that such a growing problem? Is it just that the Greed is spreading contagiously and near everyone is corrupted?

While in other news-- Transparent Solar Panels...

Not much attention in this area with all the giant oil stomping around... but scientists have invented transparent (as in glass) solar panels that can convert sunlight into storable energy. Essentially, every window in the world could collect sunlight and collectively power all the Earth's energy needs. ZERO need for oil or gas ever again and it would be FREE (after the cost of panels and installation).

You know what they say about people who live in glass houses, right? All their electronics work.

Wouldn't own an oil stock if you gave it to me. :)

Too Much Cotton Candy For These Roller Coaster Times Ahead

Why put an end to the thrills? Because nausea is here.

Citi and JP Morgan Chase Board Directors will begin voting on divestiture programs today. You made a comment about two big Asian nations, O & G... the way to "game" them is to divest our banks to state-restricted and ban national charters. Doing so would require foreign entities to fifty-fold operatives at enormous costs for moderate potential control. It would also expose manipulation.

Garland seems to be a very strong nominee for Supreme Court judge. He is very well liked and respected on both sides and actually has significant endorsements among party leaders. His nomination may likely happen in spite of juvenile protests slate-scheduled across America like some sort of new vocation venue. That said- Mitch McConnell has himself painted into a corner. Paul Ryan is drowning in his position.

A Republican was chronicled saying: The People do not elect our nominee, the Party does. Sadly, that's in direct conflict to their Party Charter and Right to Exist. Read your 7th Amendment.

Keynesian Fanaticism: Money... so they say... is the Root of all Evil tooo-day. Money, it's a gas, share it, bear it but don't a slice of myyyy stash. We won't know for sure until the 1st quarter 2016 numbers are in, presented, retracted, then corrected... but there are strong indications that consumer debt rose to record levels while the same in economic confidence- tanked. You are absolutely correct, O & G... so much currency has gone into banks to markets not main streets that the Federal Reserve faces an extremely history critical impasse. When there isn't cash flowing through economy, the value of stocks and bonds is zero in equivalence. The instrument goes invalid by the nature of it's existence. Wealth evaporates when called out because it isn't tied to anything.

A noteworthy worth noting... 800 million barrels of crude oil "disappeared" off the supply inventory. Some say it is the instrument for the recent barrel price hikes. Yesterday, over-supplies caused price deflation without this missing quantity. Once found, and it will be, the barrel price could drop below $20.

Tie each of these paragraphs together in your mind. Arrive at your own conclusion and you will likely guess why we could not forecast commonsense course to our economy since 2008. Given this... it is time to speculate on forward motion in Chaos. My favorite season.

Vanishing oil stock

Could it have been that our comments about the glut of oil and the tomatoes dumped in the rivers and whiskey drained down the sewers had something to do with the 800 million barrels of vanishing crude a couple of days later? . . guarding against the possibility!


Unfortunately, National Public Radio is/has joined the ranks of the MSM. During Tuesday's exit polling the reporters from NPR (WKSU) were asking voters "what concerns you most today". Concerns about the stock market were in the top three.
Since this is an election year, it is in the interest of all incumbent candidates of both parties, executive and legislative, to keep the stock market love fest going. Both parties are claiming responsibility for the surge that started in 2009.
IF what NPR said is true, then a sizeable number of the registered electorate is more concerned about their "portfolio" than long term fiscal responsibility. Unfortunately, a sizeable number of potential voters, that don't have a portfolio or own expensive houses, are not registered.
Even if a central banker wanted to adapt sound fiscal policy, it is probably impossible for them to keep their job due to pressure from financial corporation (donors), upper middle class (voters), and unscrupulous politicians (want to be elected/re-elected).
Similar reasons are occurring in Europe, Asia, Canada, Australia etc. People want to be comforted that a 300% return, whether it be stocks or housing, in the past five years are not bubbles.

Flying Without Pants...

The keywords are: bank divestiture in the search...

Divestiture is a rare event. It happens when a seeming oligarchy is forced into independent fractures based on some mandate (usually geographic) with stand-alone entity status and separate management. When "Bell" was divested back in 1984, it became several different entities and AT&T. It allowed competition to swoop in and fail miserably by the nature of their basis-- all executive hubris, zero cohesive usefulness in the economy. Divestiture is generally the result of greed wanting a piece of some action without the ability to compete for it and can't employ lawyers to get it prohibited.

The first article demonstrates the effective uselessness of the Gramm Leach Bliley Act to produce new competition in banking and instead-- nuisance entities meddling in banking, of which- banking itself is a nuisance. The second article describes M & A activity behind the backs of the nation... since 2009, the industry has been consolidating at incredible rates- which is not divestiture but more a scrambling to do relevant commerce in an environment the consumer has been destroyed in. Though given just one sentence at the end... commercial real estate is literally tons of nitroglycerin bouncing precariously on a rickety wagon over rubble pulled by scared horses. Buildings are only worth what their rent rolls validate and with as much as 90% either vacant or dead storage in the USA, notes are worthless and lend-able values are worse than the vacancy-manipulated housing market.

The last article is from the St. Louis Fed and it questions divestitures and M&A activity in the banking sector. It has to make sense that after 1929... 50,000 banks disappeared and throughout the 1930's, banks existed for the community theme. Almost 100% of credit transactions back in that era were Finance Company with collateral and the banks that did exist- existed for local purpose... lumber, stoves, other manufacturing or agriculture. There was no omnipotent banks and the East Coast mogul banks were busy sending operatives overseas to fleece ignorant Third World countries (read: The Loan Pushers by Darity and Horn). The new FAS mandate for reserve capital comes at the time when banks are hollow, shallow and loaded with administrative incompetence. All three articles suggest banks are scrambling frantically for some sort of substance in venue sans a viable consumer economy.

The focus today is on politics but the crisis worth putting your eagle-eye on is-- banking. Three fingers went up some time ago and I believe enough shadow proof exists to say that banks in America are in their death throes.

Is the Fed legitimizing bitcoins?

Thoughts on the bitcoin presentation of March 31, 2014 by David Andolfatto, VP of the FRB-SL :

The slide show appears carefully detached and guarded, without summary or expressed opinion in support or against.

Other than to say that hundreds of private moneys exist in the US now and the IRS has decided how to tax bitcoins, which would be through gains and loses treated correspondingly it appears to suggest that an arm of the US government validated its existence. Whether that may be challenged in court later remains to be seen. Difficult to imagine that transactions can occur, goods and compensation exchanged and not consider bitcoins currency. Someone will eventually issue a challenge. Some source should be responsible for tracking and designating the value of bitcoins at any particular time and that could open the can of worms that the St Louis Fed is pussy-footing around, avoiding controversy.

There are several commens on the presentation which O&G hadn't the patience to wait for in the slow developing video accompanying the story (V_L's third link.)- it was a matter of 6 minutes - small potatoes when you consider the implications of the system. But, it's past bedtime. The Andolfatto article has an underlying current that suggests that losses have been sustained by users, though no totals are listed, something the outline form of presentation simply skips over. It should be an essential.

As for safety? Bit coins are stored in decentralized locations, which have been penetrated, no one has an attached responsibility and if anything was lost, no indication anything has been retrieved. Value is a matter of trust; bitcoin value has fluctuated drastically (between $0 and over $1100 from Sept, 2011 to Nov, 2013 - back down to $459.64, Mar 31, 2014) as demonstrated by a study which labeled the performance a “Bubble”; and there is nothing to suggest that a bubble can or would be contained or regulated since no regulator has been empowered by any central authority with power to punish, or even administer.

It would seem that legally there is question enough whether anyone can bring charges against anyone else in the storage or exchange of bitcoins since the operation is ostensibly an implied private agreement among users. Storage appears communal, and it is questionable who would be responsible for tending to matters of ownership, liabilities, accuracy, etc.


The Andolfatto presentation is in an outline, slide presentation, incomplete and ostensibly without any personal opinions, summaries, or value judgments. If it had been presented as a paper it might have been a little more revealing of the author’s intentions or judgments. The format required the least possible commitment.

Not a satisfying document at all for an inquiring mind.

There is a question of who would use the system. If open to pilferage, it's doubtful that the upper crust would subject their resources to the implied vulnerability, and at the closing value as of Mar, 2014, the lower echelon of society is excluded. which leaves some middle category, gambling-instinct driven, cowboys and gamesters. No doubt that may suggest to some by the drastic, straight-up climb (about $900 or 450% in about one week’s time) of the value in the third quarter, 2013. This leads to the question of who would entrust their assets to such companion investors with confidence?

The History of Alternative Currencies

Long ago, Scientific American presented an article on the roots of money. Some of the earliest known forms of money were certain shells-- so instead of counterfeiting, you just strolled the beach and picked up your dividends. That system failed because it was easier to find more shells and not work. Corruption was rampant. In what was thought to be a slave operation making Iron Age nails, science gave weigh to finance- who determined the nails were a currency. The archaeological "dig" was deemed a counterfeit operation! Digging the highway between east and west shorelines in India, excavators unearthed an abandoned city and treasures including coinage dating back more than 10,000 years. Abandoned cities are examples of unit-based societies that fail to sustain without a core commercial resource to back the monetary unit. My favorite tale-- certain Roman coins held rarity value until the pools in Bath, England were drained for repair. In the soft silty clay at the bottom were tens of thousands of once-rare mint condition examples of those coins-- destroying the collector market for them instantly. Coinage from that time is now so abundant that little of it has collector value. Relatively, there was tons minted while the general population was not reliant at all on coinage outside city centers. That would be one explanation for it ending up in the clay in Bath... an offering to materialistic gods.

In the Super Nova theory... the world would eventually do exactly what is happening now until leaders are called out and debt is actually reconciled. Supposedly, the world would be in awe of the extreme debt generated corruptly and a call for automated currency would mandate the future of currency. That was-- fantasy talk. We know factually that we do not have perfect data, viable security and omnipotent cooperative use of virtual attributes. A prime example is- the Federal Reserve actually asking Congress how it's data cannot be accurate and theories recovering the nation- flawed. Those who built the spreadsheets and harnessed it's data-fill components (MIT) for the Fed admitted that the model was inaccurate from it's inception and data had never been reconciled against fraud, fluff and phony. The concept of Bitcoins is interesting. It obviously attempts to trigger an alternative supposing the calling out will occur and corruption component validated. The problem is, this system is a failure too. People everywhere know that currency is given in exchange for work done and if we have secular stagnation globe-wide, it only makes sense that current versions of money have no validity. The Bitcoin and the bottlecap have the same raw value in reconciliation.

History demonstrates one clear thing to all of us... he who has the gold makes the rules but he struggles to rule when the masses have no gold and cannot sustain living. The currencies that have flowed through sub-economies for eons have never died off. He who has the corn is a friend to he who has tomatoes and both really like the guy who makes denim work jeans. No one has a beef with the cattle rancher. The thing to contemplate is simply how far we have gone past safe waters. People without any possible means or ability to sustain are seemingly enjoying good times while literally whole nations sit and stew with raw ability, skill, craft and capacity fully available for economic use in stability.

In today's news-- the lead article says oil is causing markets to rise, but way down the page is another article stating banks are pulling credit on the coal industry. Whether Euro, Dollar, Yuan or whatever... it's dysfunction without motion if it doesn't course at consumer level- funding enterprise that hires, funding progress and making revenues that balance economic activity. Every penny "pulled" is a loss originally borrowed now laden with cost and expense. It's not rocket science... if credit losses of magnitude exist and the other half of the same sector borrows to bail... market losses "should" exist or... the currency used to do both realizes dilution. No one can say for sure how diluted our money is, but one thing is obvious... a universal currency has no value to and in the growing sub-economy, which will in fact determine what is the future currency... not Bitcoin hoarders.

Evidence Generates a monetary hypothesis

Many economists subscribe to the hypothesis (simplified) that the first in line to receive issued money or credit benefits the most; the last, those who receive the imaginary "trickle down", the least. The last probably due to the fact that the "bubble" of advantage has long since burst and issuing currency beyond that failure-point no longer has meaning in the marketplace. "Bubbles" in currency then could be accepted as a demarcation point similar to France's late eighteenth century collapse under the weight of Assignats and Mandats; or Goldman, Sachs' 1928-29 Trust funds based on non-existent equities and sold for $200+ per share, eventually easing down to $1.75: or the value of the derivatives in storage at the Fed in Washington which Goldman, Sachs again kited to leveraged values in the vicinity of a 3000:1 ratio of market value versus reserves – That figure being optimistic since, truthfully, unrevealed values were involved. But, why should we quibble inasmuch as the Fed has since tagged its own stock of held derivatives with a couple of trillion dollars’ value and uses that fiction in putting them to use rescuing the US economy with all the assertiveness of a seasoned, sophisticated confidence man.

It's an obvious truism and no mistake that the financial sector uses the term "hypothecation" and "re-hypothecation". . . the hypothesis being a bare untruth - or a total lie! Same principle!

It is precisely an evaluation of this gaming principle that a decision can be drawn from behavior allowing a declaration that at least another generation will be spent in recovery - the "generation" term being the shortest possibility and an extremely optimistic outlook.

Minsky may eventually be looked on as an incurably addicted optimist - in the same category as those now trading on the global bourses as though real money was involved - which can bring out one confirmation of the contention that we're selling off our assets faster than one by one to finance the next three days or three hours of living in an unacknowledged inflationary environment.

Daily trades are conducted in markets no longer owned by a US concern - But, then, it makes no difference who greases the slides to Perdition.

Should we then conclude that the last crisis was the defining "Great Bubble to end all financial bubbles" and that there is no recovery awaiting us? Is all activity in the few remaining active spots all show and no dough? And, from here it is down, down, down - each larger drop occurring on a loss of confidence since so many lies have accrued to our science and activity that none of it is of any believable substance?

Gold is gone as a specie; not only do few believe in fiat currency any longer but they're resorted to faux currency of their own making, accepting the false in place of the "no longer valued"; and even those few are being deceived by the machinations of the Orientals working hard to dilute currency faster than what may have been considered a normal decline given the facts of the events?

(One of the eye-opening graphs in the Andolfatto presentation recently commented on is the value of three of the largest and most dependable currencies plus the Zimbabwean dollar. Expectedly, the Zinbabwean currency trails the bottom of the graph and leading the USD and the euro is the Japanese Yen!!! Its history marking the closest to a straight line of the three. AND! The source of the data prompting the strong line is extracted from the US Bureau of Labor Statistics, Euro stats, IMF and the Ministry of Internal Affairs. . . as impartial a set of CPI based stats from a set of statisticians as might be found anywhere. . . given that one little error will be erased by the next.)

If we admit to engagement in recognized inflation it will quickly segue into hyper-inflation faster than banks can convert to the new level no matter what electronic devices, or supplementary currencies we introduce. We needn't wait for the true figures denoting the mass of excluded ex-workers who cannot be restored to a productive role in an economy unable to absorb them. Thus will recovery proceed at half-speed, and will be less than a true recovery.

When the definition of the contention is expanded, it may be true that the only real measure of value is the Labor of Man as you imply and as the older "Unscientific" economists have asserted - a truth that has been rejected as too primitive. Or, was the concept rejected as a means to create the void that brought opportunity to professors, publishers and a couple of million of "make-work-businesses" labeled consultants and scientists with book-learning and no practical experience, ready and anxious to deliver us to ruin on the basis of false theory based on conjecture and/or an unreal perception of a fantasy world they have sold to a gullible public?

Wither away?

There Is Nothing To Do

The 403 Ghost continues to appear. A disturbing encounter. My comment sucked away into space.

A routine circumvents the 403 ghost.

To be posted here.


Struggling with the 403 ghost

I’d grown into the habit of responding to the pressure of the moment in my postings: meaning, the freshest approach was to read and commit my reaction quickly. This promoted spontaneity, but then editing was required for typos, inadequacy, or inaccuracy – and there seems to be an increasing number of them all as the years pass. The resulting text may have sent me off in the proper direction: the quick response sent the text through the first firewall which consists mostly of an honest response; confronting me with the second, a desire for legibility; and providing me with the time to pay attention to my third level of editing, for the sake of fluidity.

Naturally all this takes time; and somewhere in there the ghost of 403 is activated, how long the period required for the activation is unknown and immaterial. Time seems to get lost in the concentration required for the task at hand.

Nothing seems to intrude into the area of composition. It’s when a “preview” or the “save” function is attempted that the ghost of 403 makes its frustrating presence felt – responding to a timed start so to speak. Therefore, still in the “edit” or “reply” mode, if I forget and try to review work in progress and the ghost pops up, I click on the encircled arrow return button, positioned upper left, contain my anger and frustration, highlight my work to select the text, right click, select “cut” from the pop up menu, reduce the duffminster screen , select MS Word from my desktop and paste the text I’ve copied.

[It’s assumed that the above capabilities are available to all contributors.]

To preserve the flavor of the off-the-cuff response I may even return to the duffminster screen, cut and paste to Word the first attempt at the title for the entry, which means alternately reducing or enlarging screens with my working texts until everything is transferred to my new working surface, MS Word.

Continue working on Word for an unlimited time and copy the completed text, move back to duffminster times, now not in the “edit” or “reply “ mode, open it to one or the other, paste – confident that 430 will delay long enough for a brief cursory review and return to the working box to “save”, At this point a review to assure all is properly arranged to satisfy your critical editing sense. If not, noting the correction of modifications required, and returning to the Word version takes care of that final polish.

Roundabout - and for those situations where a quick response feels more comfortable – inconvenient in that it requires a modicum of extra time complete but is much less frustrating and it does circumvent 403.

The transferring process takes a while but it within the limits of the 403 response time. I dislike posting this sequence in plain view, since whoever or whatever is responsible for 403 – be it the a normal timeout function of the Google host of the home site, or an intruder with obstructive and/or questionable motives – may recognize a limitation in his/her plan and then constrict the time allowed to accomplish the original objective.


In the limits of normal, home PC measurement, this is a massive site. No idea if O&G’s contribution is 40%, 75%, or 90% of the total; but, whatever, add the rest and we may have about 8, 10, or more bindings of about 1,000 pages of text on the subject matter – the human endeavors inside the framework of expectations of normal economic activity, its history and theory, and the role of the players involved from casual bystanders, participants or authorities.

That is a sizeable collection! - and it may be an understatement. This, in view of the fact that certain items have been culled through before transference here, or since edited out to clean up the site.

Not being involved in the original set-up of the site, and not having spent any time studying conditions or terms attached to the operation of the site, we may be approaching its limit on allotted space. No way of knowing who lays claim to the site now, whether it is still Duff or he has lost interest in the venture, or still maintains a presence in the background – it is sincerely hoped he does – or some other magnanimous souls have stepped in and now supports us in our efforts - we just keep plugging along as if it were a God-given right for rogue contributors to voice their opinions.

The only protection we have is from the extensive readership and wide ranging exposure.


There are limits to the scope or range of human thought on any given subject; what we think of as original thought may be simply a function of time. Given enough time eventually a number of compatible souls may eventually arrive at the same point in analyzing and evaluating situations and the same cure can become an apparent necessity. This was driven home tome recently in a recorded talk by Adair Turner in a MP3 recording of an interview dealing with his new publication, Between Debt and the Devil.

O&G claims no rights but he does wish to point out that somewhere along the line of development in the tsunami thread, which could have been in 2009 or 2010, someone asked how O&G would go about handling credit when the statement was made that issuing the total amount of credit needed to be controlled. The suggestion was that it could be rationed. Arbitrarily it was pointed out that if GDP growth were in the order of 3% annually, banks should be limited to issue that amount plus a slight bit extra when the economy was in an expansionary mode. Naturally, when it was in a contractionary mode, the figure would be reduced below the 3% level depending on the severity of the contraction. Without voicing the fact, implicit in the proposal would be something similar to the limits of consumer and housing credit made available.

Lo, and behold, Adair Turner suggests – without using the descriptive term “ration” – that issuing credit should be controlled dependent on the rate of economic growth. O&G’s thought was an off shoot of a comment attached to a voxEU paper a gentleman who identified himself as a resident of Ohio – who suggested that the right to issue credit be auctioned off to US commercial banks and in that way limited to whatever was determined appropriate and not likely to cause a crisis. So, the idea was not original to O&G, but it proposed a measuring rod for limits. How Adair Turner cam about his version may be known to him alone; but the truth of the matter is that so much conversation passes between so many people that it is impossible to remember everything that transpires. It is especially difficult when an economist is active among other economists, or a banker among his friends and competitors, and so on. Somewhere along in there the limits and similarities of human thought makes its appearance and we’re back to “lo and behold!”

How many times and in how many different ways have we repeated ourselves and each other? And, it all adds up to a weighted site, testing someone’s tolerance and depending on someone’s generosity. We have of whose or to what use the thoughts are applied – or whether they are faithful to the original message!

But, that’s life and that’s the human mechanism.


At any rate, among the foregoing text is one means of circumventing the 403 ghost.

Post script

That is how I did the above. Free of the 403 ghostly interference.

Our Issue Is...

Our 403 issue is not what you think it is. Where is Duffminster? Basically, this is a Pro-Boards forum subject to the whim of their support team. We should be deleting the link to the not MSN forum and having a look at who is on our "guest" list.

Stock brokers KNOW they are screwed by our 3-dimensional integrity problem. More and more experts are rationalizing the 90% wipe-out of Dow stocks in 2016. It only makes sense that the paranoid would manipulate to squelch comments contrary to their positions-- which are in jeopardy. Banks know they face divestiture.

Global concern exists about WHY the largest cadre of Presidential hopefuls have came and been consolidated without ANY of them talking up the global to national to local economic crisis that is causing anger and frustration. There cannot be 62 mega-billionaires controlling most of everything and 3.5 billion ordinary people forced into destitute living.

All towers crumble. This one needs to sooner--


Putin was in the news everyday, now barely. The Brussels event and a call to beef-up security at airports BUT, an analysis of security beef-ups suggest they do nothing but to generate paranoia and anti-business by presence. The media diverts from Big Oil but our crises are so heavily embedded in oil corruption that popularity for the issue no longer needs media attention. The ploop effect suggests the rise in stocks since January makes them exposed to significant retraction because the rise has no legs or substance. Ploop-- the stone dropped in the pond to make wave rings also makes a back splash... that always accelerates as it falls back into the pond. There is a bigger issue creeping behind the scenes today. I know it is there but cannot make it turn visible to validate it. Some significant aspect is in play.

Redistribuing Respect

Respect is a bigger problem in our societies than raw economic inequality. Imagine a country where the rich are willing to send their kids to school with the kids of the poor, where people can walk past the houses of the rich without being escorted out by a security guard, where the wealthy are happy to have the government use some of their income to buy food for the poor. A country where black people can get a job as white people of tha same qualifications, where women don't get harassed by men all day. A country where income, wealth, race, gender, education level, etc., don't effect your social status one bit.
Let's create that country. I bet if we lived in that classless, fair society, pressure of fascismo would essentially vanish.
I have always been a communist revolutionary at heart. Inequalities between human beings have always annoyed me, and I have the strong desire to see them eliminated.
We generally discuss three kinds of "equality": 1) equality of outcome, 2) equality of opportunity and 3) equal rights under the law. I think all three are important, but I find that there is something missing from the list. It is equality of respect. We seem to have mostly forgotten about equality of respect. Respect is a big part what makes people happy.

Happy Easter, anyway.