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red penguin of doom

indentured servitude - PART ONE

Posted on 2009.02.27 at 19:01

whereas many old people are currently slaves to their dentures, the time may be coming soon when we ALL, toothless or not, become indentured to jack-booted thugs desquised as Tooth Faeries!

but seriously - this is a serious post about the economy and i hope you read it - thanks
:)

capitalism is a pooling of abstracted wealth from labour, which is then devoted to new, sometimes unrelated, and sometimes completely impossible, endeavours, or FUTURES.  to keep things running smoothly, this investment goes back to the base, or basis, of the economy, or else it creates new avenues for the base to pursue, counting on the multiplier effect of the tendered currency to keep values stable and therefore to create the sensation of overall GROWTH of the economy.  normally, the economy has to grow simply to keep ahead of growing population and need.  supply tries to keep a little ahead of demand.  the illusion, or virtual reality, of growth makes it appear that there is no real unfair abstraction, or exploitation of labour.  it appears possible that everyone has a "fair" chance of a better future - "fair" being defined by social mores, morality and religion, (which are also mutated by economics).

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but within capitalism, there arise bottlenecks or saturations.  for example, relative prices may rise all around until they not only exceed demand, but they in fact deflate the valuations of demand.  that is what has happened recently, (among other things), i.e., people have greatly stopped valuing products at their given prices, being unwilling to buy due to personal debts and lack of confidence in the system.  another bottleneck is overproduction of products, which is similar.  in the 1800's, we easily dug out of overproduction by turning to international trade, which can hardly be done presently, and which sowed the seeds of today's decline.  it kept the banks happy.  another bottleneck is when wages rise so high that, along with other costs, there is insufficient profit to be made by companies, given the current class structure, population, and methods of exploitation.  in this case, the solution is to kill a lot of people - by the plague, war, or what have you, which, paradoxically, can lead to the rise of a healthy middle class.  finally, another bottleneck is when so much abstracted wealth is invested into risky pursuits, as when sub-prime mortgages are overleveraged dozens of times in ultimate wall street ponzi schemes like credit default swaps, or the WAR IN IRAQ, that universal credit just dries up - which is the same thing as individuals refusing to buy because lack of confidence, except that the failure is tragically and deeply etched into the entire system of the economy*.  impossible futures.  that, ultimately, is the goal of unregulated capitalism.  greed, as a universal.  in a fiat currency system, unregulated greed creates a monstrosity of demand, where demand itself is abstracted and abstracted until all it is virtual - impossible credit and investments - so that REAL demand easily collapses.

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most of the bottlenecks i have mentioned have been cases where supply is greater than demand.  supply-side.  too much debt in all the wrong places.  based on illusory futures.  but another bottleneck, where demand is greater than supply, is INFLATION.  that's where people have lots of money to throw at relatively few goods, and so sellers happily raise their prices.  competition is null or ineffectual, only occurring at certain nexi in the economy, mainly amongst corporate juggernauts - as in banks or military contractors bidding for motherloads.  in booming economies, inflation mainly benefits the urban wealthy elites.  inflation is tantamount to a war against the poor, diminishing their possible futures, though not their illusions.  inflation also occurs when, yes, people have too much money to throw at goods, but (consequently) the value of that money becomes less and less, which is accelerated by the loose printing of NEW paper money out of thin air by the elites: money which is backed by NOTHING - not gold, not sense, only the conspiracy of members of the elite to prop up their own lifestyles (expectations/demands/control) versus the rapid decline of those lifestyles in the major part of society.  so, it is an addiction which tends to end in coups or revolution or such.  it is important to note, relevant to our times, that destructive inflation can follow from a situation described above(*), where demand collapses - because the economy eventually adjusts, i.e., chain stores go out of business, and (virtual) demand is recreated by the consequence of having too much currency and too little to buy, except for the elite.  this is accompanied by a true collapse of borrowing capacity at the top, e.g., China refuses to buy more US Treasury Bonds, and a collapse of the international value of the currency, i.e., dollar.  a depression, which we are in, can be followed and exacerbated by a hyperinflation, where the VIRTUAL war which has been waged against the poor becomes REAL.  for future scenarios, it is useful to study Weimar Germany, which preceded NAZI fascism and the persecution of Jews based on anger over international money-changers, and Communists.

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the United States has enjoyed a unique position in the world economy, allowing it to keep the value of its dollar fairly stable, despite printing dollars based on nothing, or despite vast expenditures in dead-end militarisation.  what is that position?  after WWII, and after rebuilding Germany and Japan, the US succeeded in doing what Germany was HOPING to do - it made its currency the standard currency for international trade.  the communist countries which resisted this became mortal enemies, based on the argument that they were Godless and expansionist.  in other words, they did not share OUR expansionism, excused by our nationalized religion.  (just as the poor in collapsing societies do not share, in reality, the expectations/demands/control of the greedy urban elites).  the commies would have won out, if it weren't for the fact that our capitalism, which is momentarily powerful but self-destructive in the long-term, was able to selectively throw money around.  BACKED BY THE STRONG ARM OF THE US MILITARY.  primarily in this respect, the growth of the US military-industrial-(media-banking) complex was a "useful" investment.  the main reason we went into Iraq was because this oil-strategic country was threatening to go OFF the dollar and onto the Euro.  thus, we held fairly stable the value of the global fantasy dollar simply by threatening military invasion or nuclear destruction.  that is the whole M.O. of an essentially weak bully.  and, weak we have become, no?  who builds the tanks when the auto companies go under?  the Chinese?  in addition, the US/CIA has propped up invalid elites of countries-having-collapsing-economies, so as to extract/abstract resources and military alliances.  having succeeded in places like Chile, the whole scheme of monopoly privatization and military rule will be turned against the people of THIS country soon enough, because, because, it is all based on things falling apart.  stress, fear - these are what feed the profligacy the elite.  and now, i have arrived at the main point of this journal post.  in capitalism, the law of supply and demand, without vigilant ethics, quickly evolves into the law of enticement and profligacy...  and into the ultimate ethic of: "kill them all, and let God sort them out."   i.e., "let them eat cake."

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the major problems in our society's economy can be traced to two dates: 1913 and 1947.  in 1913, we began the replacement of government revenue via TARIFFS by INCOME TAX.  and we also created the appearance-only-FEDERAL RESERVE ("FED") bank system, which is responsible for printing fantasy money.  after Keynes, the Chicago school came along with Reagan and successfully argued that, instead of strategic government spending and taxing, we should rely on manipulation of the money supply and interest rates by the "FED", ("supply-side"), and this is one reason why our economy has been falling apart.  (an aside, both Keynesians and supply-siders have resorted to excessive government borrowing to support their ideologies, which invalidates the former more than the later.  FYI, Obama belongs to the former).  in 1947, the US created the National Security Act, and the NSI, and the CIA.  This came on the wake of WWII, after the assimilation of NAZIs and Jewish Scientists from Germany, (and coincided with the establishment of Israel as a nation state).  This may not immediately appear as an economic act, but it has lead to such affairs as Iran-Contra and the Patriot Act and the deflation of the American spirit.  other major problems have been issued by Richard Nixon, who completely removed the dollar from the gold standard in 1971, and by Bill Clinton, who allowed the destruction of the separation of banks and investment institutions in 1999 or 2000.  The REVERED allen greenspan, who kept interest rates low, which was partly to credit for Clinton's good times, has been the ONLY person to admit that everything was a fucking mistake.  poor guy.

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now, i don't want you to think i am entirely anti-American.  i simply think that vices like greed and arrogance, unchecked, tend to corrupt any society or hegemony.  i honestly believe that, more than any empire in history, the United States has been ethical.  i also believe that is has been a new and honourable experiment, unfortunately gone bad.  and i also believe that it MAY be put back on the track of ethical progressivism, whatever that means.  yet i also believe there are fundamental flaws in our current version of capitalism which foments greed and waste.  furthermore, this version is based on material production, (instead of, say, personal time, labour, or value), which only ends in environmental destruction.  i believe there have been great presidents, like jackson and kennedy, who fought the destruction by central banks.  JFK may have been assassinated BECAUSE he wanted to end the FEDERAL RESERVE, and actually proceeded to print US GOVERNMENT notes instead of FED bills.  yet i also believe Barack Obama has some CRAPPY cabinet members.  from now on, when i refer to "capitalism", i am certainly referring to our current old-world brand of capitalism, and ...........................

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capitalism is premised upon collapse.  i have written before, more so in a college paper, that capitalism is based on need or scarcity.  i don't have personal writings posted to which to refer you, but you may google THE VENUS PROJECT or the ZEITGEIST PROJECT.  the point here is that capitalism is based on collapse.  and this is not necessarily a bad thing - it is natural, in a sense.  i believe that, in physics, electricity is essentially a collapse of various wave-forms, or alternate universes, into one thermodynamic time-frame.  anyone who has studied physics needs to step in here and help expound.  because i am cutting this short.  obviously, capitalism is based upon the collapse of the poor, allowing competing juggernauts to move in and extract/abstract wealth from labour at a better profit.  capitalism is based upon the fall of corporate competitors.  and, ultimately, capitalism is based upon the investment of capital in farther and farther risks, which can undermine similar investors.  what isn't taken into account, the further up the ladder we go, is whether these risks might actually benefit the system as a whole, and so the poor.  the further up the ladder we go, the more it is merely a game, not sweat and toil, not survival or need, no, it is merely a game for the wealthy.  capitalism (non-adam-smith) survives upon the whims of the elite.  one perfect example of collapse, upon which capitalism is based, and about which i have been wanting to write for some time, is the conspirate investiture in impossible risk...

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i want you to understand this.  i think it was inspired by my reading of THE ECONOMICS OF TIME AND IGNORANCE many years ago.  i believe the title of that book was taken from some treatise by keynes, maybe smith.  but this is basically my own theory.  ok.  you get several investment houses investing in alternate futures.  alternate pay-offs.  only a few of them succeed.  the pool of investments COLLAPSES into THEIR own particular advantage, just as, in physics, a wave-form collapses into a PARTICULar reality.  (for physics beginners, google and study SHROEDINGER'S CAT).  in a penultimate example of capitalism, which basically is GAMBLING, you have several competitors investing in possible futures.  in unregulated capitalism, which we have had for the past 9 years or more, investors don't take gold, no, they don't take currency or bonds, no, they take DEBTS, in OUR case, sub-prime mortgages, and over-leverage them to the max, which means that they use them as "real" collateral, (assuming these debts SHALL be paid), for gambles - e.g., "i have $1000 of debt which SHALL be repaid" (i.e., "i have $1000"), "which i shall put up and gamble for such and such, say $10,000 worth of pay-back".  well, you have people gambling on these debts and banking on 10x return, and selling that off to people who expect, gross, 20x return, who sell it off for 30x return, and so forth.  complete idiocy.  thanks to allen greenspan.  what this is, if you can't see it, is a LOT of idiots creating illusory wealth based upon completely impossible futures.

 

the phenomenon of ultimate (virtual) capital collapse will be explained "momentarily" - (which is a word i HATE btw).  i just took a green tea break, and forgot what was the important thing i was going to say here, so i will fill it with secondary fluff.  cut - ok - i remembered - - - supposedly, the creation of real wealth is made when someone saves money and this money is used to invest in else wise productivity, which returns as INTEREST to the saver.  this has been mutated into the DEBT of a borrower being traded AS IF IT WERE SAVINGS, since it has a "good" chance of being repaid, at a decent rate of interest.  now, debts are traded and leveraged and invested at absurd rates that they no longer have anything to do with real value.  or with reality.

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remember, that all competing investments in possible futures have been derived from the abstraction, or exploitation, of wealth, and debt, from labour.  and remember, that the duty of the fair system is to keep the value of the currency fairly constant, so that the majority of players, which hopefully includes labourers, continue to adhere to the system, making such-and-such a month, believing in better futures.  everyone is betting according to these standard values, including banks and investment houses.  BUT, when the investors get so EXTREME, according with these values, based on over-leveraged debt, then capital, at the top, is bound to fail, and this ultimately ends up as a radical readjustment of the STANDARD values, which basically means inflation, or a war against the poor.  so, ok, i continue... you have investors betting and betting on overleveraged "assets", all throwing their money into a giant hyperspace pool.  this is a pool which is similar to a masturbatory fantasy.  if it leads to a real relationship, then it is good.  if not, then no.  most likely, it is profligacy.  imagine it this way: say seven giant investors, based on debt, are all throwing their "money" into one round table.  their money is actually abstraction based upon abstraction - they are merely throwing in abstract numbers based on essentially nothing.  they can say that there is far more than 60 trillion dollars of new wealth created in this pool, far exceeding the GDP of the entire planet, and far exceeding the value of all the global currency created, but if it has nothing to do with reality, i.e., labour and manufacturing, then it is a consummate delusion.  it is essentially inflation held, momentarily, in a quarantined fool's game.  so, you have seven investors, throwing their fantasy money in, bluffing and bidding, driving up the fantasy value of the pot by trillions and trillions of dollars - meanwhile, you have mortgages and IRA's and CDs and mutual funds and hedge funds all keyed into this pipe dream.  suddenly, it comes time for the real value to show itself - or it comes time for one or a few investors to succeed, and clear the table.  this is a COLLAPSE of quality or wave-value into particle or real values according to the set standard currency values.  problem is, the gambling has by FAR exceeded the standard currency values to support a real return for any one of the seven investors.  so - the collapse of HYPERSPACE into a REALITY doesn't work, and the whole fucking economy of the globe ends up suffering.  because it was all too abstract.  based on unregulated greed.  no possible futures.

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capitalism is based on collapse of investor bubbles, whereby some survivors (short-sellers) profit, and so forth, but when it gets too abstract, capitalism itself fails.  period.

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there is only one field of applied mathematics, and that is economics.  one could argue physics, but many could argue against that.  economics is not the study of goods and manufacturing and labour and trade and so forth.  it is essentially the study of PSYCHOLOGY - psychology under stress or not under stress.  so, when you go in with MATHEMATICS, you find a shitload of unquantifiable variables.  these are all value judgments.  these are all personal valuations.  these are all spiritual longings.  they have nothing to do with our textbook understandings of economics, or of evolution, for that matter.  the whole mistake of the last few centuries has been the quantification of life-form phenomena into categories and mathematical equations.  but the true specialist in accounting, or economics, or science, KNOWS the value of these "external costs".  and so, to the pedantic economist, the application of mathematics completely ignores the fact that MATHEMATICAL VALUES ARE MUTATED IN THE HUMAN MIND.  applied mathematics in economics proves that the absolute values of mathematics are inherently errant.  one cannot reduce the universe to a set of finite QUANTITIES and ignore the equal value of QUALITY or of spiritual or chaotic influence.  one cannot say that the universe is collapsible to PARTICLE only, without understanding the profundity of WAVE.  in economics, this means that it is impossible to understand or regulate an economy in perpetuity without understanding that the "standard value grid" upon which it is based will eventually fail.

 

bringing this closer to home in quantitative economics: the idea of SCARCITY should not be based on quantity, but on the failing ability of set structures to extract/abstract resources, as they are institutionalized along the set standard value grid.  so, to insert, my theory that capitalism is based upon scarcity (and collapse) is in fact to say that capitalism is based upon it's own institutional technological limitations.  thermodynamics.  entropy.  oil.  waste.

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i want to clarify, a little, my image of investors at the round table...  where possible futures are collapsed into one future....  let's start with only two investors, or gamblers, sitting at a round table.  even though it is easier for them to borrow from, and owe to, vast populations of poor folk out there in the economy, since they can pass the buck better, and hang the poor, let's instead say, for simplicity's sake, that they are merely betting against each other, borrowing and/or owing each other.  in them, the redemption of the risks or futures reside.  so, one bets $100 that a coin lands HEADS, and the other bets $100 that the same coin lands TAILS.  this is fine because they can each afford to give up $100 if they lose.  because each holds $200, covering the 50/50 chance.  but what happens if they over-leverage, betting $200 - or betting $2000 - or $10,000 - on one simple 50/50 coin toss?  well, the loser becomes heavily indebted to the winner.  it doesn't matter that the pot may call itself worth $20,000, when it is not based on real wealth, but on promises, on debt.  so - when that coin lands on one side or the other, that $20,000 worth of hyperspace suddenly COLLAPSES into a reality of bankruptcy.  whereas it would have collapsed into a useful future had the players been leveraged conservatively.  now, take a look at that table when there are MORE than two players. seven.  or hundreds, or thousands - all dangerously over-leveraged, betting far more than they can afford if they lose.  the pot goes up to trillions upon trillions of dollars in "value", or possible futures.  and the risks are more than simple 50/50 coin flips; they may be far more complex and extreme or abstract.  baby, when that multi-trillion-dollar hyperspace finally is forced to collapse into a SINGLE reality, we suddenly have trillions of dollars of nothing but debt on our hands.  so significant a debt that $800 billion handed out to banks hardly makes a dent.  a debt that far exceeds the capacity of the real world to cover.  that is my round table analogy: many players throw in many ghosts, they mix and mingle, they call themselves gods, and they ultimately vanish into a storm of sulfur and tears.  "no problem, print more paper money", say the elites.  everyone contributes but a piece of the pie, expecting to own the whole pie - but when all the pieces fall into place, there is les than a pie, less than a piece.  this is the way of ungoverned greed.  just as an eye for an eye makes the whole world blind, want for a want creates a world of need.  all this merely to stave a rising tide of discontent, and hold the dollar stern.  fear, loss, hunger, greed - much more than need - spire capitalism into it's ultimate pyre.

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investment is what allows banks to profit, to pay interest on personal savings, or to feel safe handing out mortgages.  but when banks are severely overleveraged, then there is no limit to the mortgages they will greedily write - UNTIL, finally, THE UNIVERSAL COLLAPSE - and then all bets are off: no more credit left for the real economy.  no more appreciation or respect.  all because wealth, or freedom, was SEVERELY ABSTRACTED INTO IMPOSSIBLE FUTURES.  this is the beginning of the war against the poor: the calm before the storm.  the silent grasping for control, for expectations, for lifestyle, before the INVISIBLE HAND dons it's military glove - it's true apparel - and martials law against the innocent and humble.

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innocence and humility.  the salt of the earth.  and spice of life.  WISDOM IS THE PRESERVATION OF INNOCENCE THOUGH ADVERSITY.  word.

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the great round table of finance capital accumulation, (overleveraged loan "assets", derivatives, default swaps, phony insurance schemes, hedge funds, etc.), which is symbiotically connected to Wall Street, is a great sphere of hyperspace, with little planetary collapses here and there, fed and suspended by a constant hubris, or expectation of increasing value(s).  it balloons, en gross, to a fantastic value of hundreds of trillions of dollars - FAR MORE MONEY THAN THE WORLD POSSESSES.  the entire world becomes overleveraged, to the extent that it is systemically invested in this scheme.  there is virtually an infinity of false promises which can never be redeemed.  finally, it collapses into ONE REALITY or universe all at once, and what everyone had valued as something as big as a cosmic football field, turns out to be little bigger than a bottle cap.

what happens to an economic system where all transactions and promises and values and legal tender beneath, in the pyramidal base of this balloon, were pegged to the expectations and values of the balloon?  they also collapse - CREDIT DISAPPEARS - everyone goes running for some solid REALITY to hold onto.

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economics is mathematics applied to psychology.  and it can be read like psychology, with signs and habits of the heart which can foretell the future.  this collapse was in the cards of 9/11, of the movie Titanic, in Katrina and the Tsunamis (ha!), and other events, all of which had measurable economic impacts, but psychic ones more so.

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there are other, more practical roundtables in the great pyramid of economy, which turn together like cogs in a great clock.  there is law and politics and commerce and industry, and so forth.  but the most important wheel of all is the roundtable of THE COMMONS.  this is the TRUE cosmic football field - actually more like a Central Park - where run free the values and acts of Civil Society.  it's the inalienable place where our rights and humanity reside, where neither law nor institution may reach in far enough and collapse our thoughts and judgments into theirs.  here, no bankster can knock on our door and agreeably haul us away into a debtors' prison.

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or at least, that was the way it was supposed to be.

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think about what will happen to the Commons and Civility when a veritable multitude of idiots sees no alternative but to rape and plunder the worth, and goods, and credit, and decency we cherish in this, our heart of society.  when, as there is no more Capital pie to gobble away, the institutionally greedy turn towards the pie of the Commons, intending similarly to collapse away it's values into their own personal fiefdoms, seeking to render Servitude from our spiritually-grounded CommonSense.

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ok - i think i have said all i've needed to say for now.  this is leading up to something more.  so please read future posts.  thank you.

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