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The world's media is abuzz with financial crises news, corporate and sovereign bankruptcies. The battle of the minds have been joined, as the world's pundits attempt to confuse or educate the masses into compassionate understanding of their current plight. Incompassionate realization and truth is not compatible with the status quo, and shall be avoided at all cost. Share the blame mantra. Make people believe they are really also at fault for their current predicament, and that in order to absolve themselves of guilt for lack of understanding or common sense, a new government messiah has been promoted, to sway and coddle the crowds through this unfortunate but predictable unfolding of human engineered events. The comprehension level of the masses may not extend to CDS's and systemic credit freezes, but it does extend to mortgage defaults, unemployment and homelessness. And the masses have yet to be neutered of their capacity for collective anger.
Money at interest. Barter. Markets. Medium of exchange. Credit. Debt. ATM. Plastic. Electronic Fund Transfers. Bank Clearing. Accounting. Swaps. Sweeps. Fraud. Theft. Confidence. Gold. Bretton Woods. Nixon. DeGaulle. Trust. Leverage. The list goes on. Some items are more anchored in history than others. The modern functioning economy makes use of them all. What we currently are experiencing is a breakdown in the relationships between the components of a functional econominc/financial system as it has evolved over time. Fundamental rules have been violated. There are consequences of ruptured dams. Dams break when you exceed their holding capacity and limits of structural integrity. Dams have to be drained until they can be rebuilt. The river has to be diverted around the construction site. The lake behind the broken dam will cease to exist. Everyone knows this. To pretend otherwise for the banking/financial/confidence system is tantamount to willful ignorance.
$Million. $Billion. $Trillion. $Quadrillion. Pretty soon the sheer magnitude of the numbers have lost all connectivity with the reality of most people, whose ears are repeatedly filled with illustrations of meaningless numerical concepts, far exceeding the common sense reality of the majority. The news is broadcast for the majority by the minority, and it is part of the system of governance for a functional economic/financial society. Pundits take a crack at the main stream media, and illustrate the magnitude of our economic malaise by stacking $100 bills end to end part way to the sun, or just plain stacking them high, replacing one meaningless concept with another. The measured length of hundred dollar bills summed together with that of its cousins, sisters and brethren has absolutely zero meaning with respect to the required components of a functional economy.The same holds true for other allegories that fail to address the money system. The pundits that promote these allegories are either ignorant or in leauge with others. Railing at Keith Olbermann for performing his assigned task does nothing.
Mathematics. Arithmetic. If you believe that 2+2=4, then you should believe the following. Compound interest at 2%. A miniscule interest charge measured by todays standards. Through compunding the interest charged on a single unit of money can be written as follows: money-amount * 1.02 * 1.02 * 1.02 .... (adding another term for each year) .... and things go on. That is, if you can place your faith in mathematics and calculations and really "believe" that the calculator will return a correct result when you punch the buttons. We reckon our current time since the long ago birth of a man some 2000 years ago. History tells us they had money then. A functioning economy of sorts. Mediterranean trade. Roman subjugation. Payments for goods. Money of gold and silver. If the betrayer would have placed only a fraction of his purse at interest, his descendants would be wealthy beyond imagination, and the world would have been hollowed out.
Let me show you. Open the calculator function under Windows. If you run Apple you are smart enough to figure out a substitute on your own. You'll find the calculator under Accessories. Set the "View" to Scientific. Got that! If not, that's ok too, but you probably shouldn't be reading this, or you are selectively aligning yourself some standard deviations below the mean. On the keypad, punch in 1.02, then hit the "x^y" button, then on the keypad punch in 2000, then hit "=". The display now shows you a large number. This is the multiplier for some amount placed at 2% interest for 2000 years compounded annually. On the keypad hit the "*", then punch in 0.01, then hit "=". Now the display shows you what one cent ($0.01) would have turned into. To make this a little easier to view, hit the "/" key, then on the keypad punch in "1","Exp","12","=" to get the answer in trillions of dollars. Yes. The calculator really does say that $0.01 placed at 2% interest for 2000 years turns in to $1,586 trillion, or a hundred years of US GDP. If you don't like 2%, change it. If you don't like 2000 years, change it. Now, if you really believe that one cent invested passively over a long period of time, ownership intact, can present a money claim on the entire productive capacity of 300+ million people of the allegedly most productive society the world has ever seen for the duration of 100 years, you ought to have your head examined. But such is the law of numbers, when examined at the extreme.
What the previous exercise shows is that a purse of silver was certainly not placed at interest anywhere in the world 2000 years ago, and allowed to compound at 2% interest, since that numerical representation of wealth would today dwarf all known hoards of "money", electronic or otherwise. So compound interest is not a sustainable operation spanning millenia. Compound interest applied to any finite system will grow out of bounds, which is what we are experiencing today. The current "money" system, which is engineered with "debt/credit" as its foundation, has breached its sustainable limit. Stimulating the economy without addressing the fundamentals of the "money system" decay/collapse will not restore economic prosperity. Money at interest, does not price risk in venture. A functional society requires an efficient "money system", but "money" can be made available through means other than extending fractional reserve privilige to the banking class and putting a price on the existance of money. A society that elects to use a money system founded on credit/debt at compound interest will reap the consequences. Balanced budgets, clearing debt, zero inflation are oxymorons within such a system, since following those recommendations in the aggregate would extinguish all money. It also makes a liar out of any politician espousing ideas of balanced budgets, reduced debt, and low inflation since simultaneous positive action on these items is tantamount to a reduction in the money supply, and unless matched by a more rapid utilization of the existing supply, a reduction in overall economic activity as measured by money is the result. The logical mathematical outcome of money at compound interest, as an engineered design feature of money's existance, embeds within itself the ultimate absolute concentration of power and wealth with the creators of "money".
Money at interest. Barter. Markets. Medium of exchange. Credit. Debt. ATM. Plastic. Electronic Fund Transfers. Bank Clearing. Accounting. Swaps. Sweeps. Fraud. Theft. Confidence. Gold. Bretton Woods. Nixon. DeGaulle. Trust. Leverage. The list goes on. Some items are more anchored in history than others. The modern functioning economy makes use of them all. What we currently are experiencing is a breakdown in the relationships between the components of a functional econominc/financial system as it has evolved over time. Fundamental rules have been violated. There are consequences of ruptured dams. Dams break when you exceed their holding capacity and limits of structural integrity. Dams have to be drained until they can be rebuilt. The river has to be diverted around the construction site. The lake behind the broken dam will cease to exist. Everyone knows this. To pretend otherwise for the banking/financial/confidence system is tantamount to willful ignorance.
$Million. $Billion. $Trillion. $Quadrillion. Pretty soon the sheer magnitude of the numbers have lost all connectivity with the reality of most people, whose ears are repeatedly filled with illustrations of meaningless numerical concepts, far exceeding the common sense reality of the majority. The news is broadcast for the majority by the minority, and it is part of the system of governance for a functional economic/financial society. Pundits take a crack at the main stream media, and illustrate the magnitude of our economic malaise by stacking $100 bills end to end part way to the sun, or just plain stacking them high, replacing one meaningless concept with another. The measured length of hundred dollar bills summed together with that of its cousins, sisters and brethren has absolutely zero meaning with respect to the required components of a functional economy.The same holds true for other allegories that fail to address the money system. The pundits that promote these allegories are either ignorant or in leauge with others. Railing at Keith Olbermann for performing his assigned task does nothing.
Mathematics. Arithmetic. If you believe that 2+2=4, then you should believe the following. Compound interest at 2%. A miniscule interest charge measured by todays standards. Through compunding the interest charged on a single unit of money can be written as follows: money-amount * 1.02 * 1.02 * 1.02 .... (adding another term for each year) .... and things go on. That is, if you can place your faith in mathematics and calculations and really "believe" that the calculator will return a correct result when you punch the buttons. We reckon our current time since the long ago birth of a man some 2000 years ago. History tells us they had money then. A functioning economy of sorts. Mediterranean trade. Roman subjugation. Payments for goods. Money of gold and silver. If the betrayer would have placed only a fraction of his purse at interest, his descendants would be wealthy beyond imagination, and the world would have been hollowed out.
Let me show you. Open the calculator function under Windows. If you run Apple you are smart enough to figure out a substitute on your own. You'll find the calculator under Accessories. Set the "View" to Scientific. Got that! If not, that's ok too, but you probably shouldn't be reading this, or you are selectively aligning yourself some standard deviations below the mean. On the keypad, punch in 1.02, then hit the "x^y" button, then on the keypad punch in 2000, then hit "=". The display now shows you a large number. This is the multiplier for some amount placed at 2% interest for 2000 years compounded annually. On the keypad hit the "*", then punch in 0.01, then hit "=". Now the display shows you what one cent ($0.01) would have turned into. To make this a little easier to view, hit the "/" key, then on the keypad punch in "1","Exp","12","=" to get the answer in trillions of dollars. Yes. The calculator really does say that $0.01 placed at 2% interest for 2000 years turns in to $1,586 trillion, or a hundred years of US GDP. If you don't like 2%, change it. If you don't like 2000 years, change it. Now, if you really believe that one cent invested passively over a long period of time, ownership intact, can present a money claim on the entire productive capacity of 300+ million people of the allegedly most productive society the world has ever seen for the duration of 100 years, you ought to have your head examined. But such is the law of numbers, when examined at the extreme.
What the previous exercise shows is that a purse of silver was certainly not placed at interest anywhere in the world 2000 years ago, and allowed to compound at 2% interest, since that numerical representation of wealth would today dwarf all known hoards of "money", electronic or otherwise. So compound interest is not a sustainable operation spanning millenia. Compound interest applied to any finite system will grow out of bounds, which is what we are experiencing today. The current "money" system, which is engineered with "debt/credit" as its foundation, has breached its sustainable limit. Stimulating the economy without addressing the fundamentals of the "money system" decay/collapse will not restore economic prosperity. Money at interest, does not price risk in venture. A functional society requires an efficient "money system", but "money" can be made available through means other than extending fractional reserve privilige to the banking class and putting a price on the existance of money. A society that elects to use a money system founded on credit/debt at compound interest will reap the consequences. Balanced budgets, clearing debt, zero inflation are oxymorons within such a system, since following those recommendations in the aggregate would extinguish all money. It also makes a liar out of any politician espousing ideas of balanced budgets, reduced debt, and low inflation since simultaneous positive action on these items is tantamount to a reduction in the money supply, and unless matched by a more rapid utilization of the existing supply, a reduction in overall economic activity as measured by money is the result. The logical mathematical outcome of money at compound interest, as an engineered design feature of money's existance, embeds within itself the ultimate absolute concentration of power and wealth with the creators of "money".
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