alajac

Wall Street: Dumb as It Ever Was

ALL human activity (including "investing") involves speculation. Determining what is a "probabliity" entails ruling out many other "possibilities" (like that "the world might end tomorrow, so why am I saving my money anyway?")

The ongoing Industrial/Cybernetic Revolution is going to keep replacing (world-wide) human labor with automation, increasingly faster than human labor-required tasks can be produced. Thus we need either a revolution in "economic resource distribution" or else there will need to be a lot less people. If you don't help me with the former, the latter will be the result.

Let me know asap: time grows short.

The Intrinsic Value of Nothing, Part 1

Both the Austrian and Hamiltonian systems are based on lies. See my previous post for argumentation.


On Oct 29 12:45 PM RiskAverseAlert wrote:

> Still, sir, I have said this before in this forum and I should say
> it again: the Austrian school is one whose principles best suit a
> fascist social arrangement, whereas a Hamiltonian credit system best
> suits a nation whose foundational principle seeks to form a more
> perfect Union, establish Justice, insure domestic Tranquility, provide
> for the common defence, promote the general Welfare and secure the
> Blessings of Liberty to ourselves and our Posterity.

The Intrinsic Value of Nothing, Part 1

John Lounsbury,
You make a good and very important point, even if you are not arguing it as elegantly as my anal mind requires.

"Intrinsic value" is not the same as "utility value": yes, things like air and food have a UTILITARIAN value for beings with bodies that need such things in order to continue surviving, but that is NOT the same thing as intrinsic value in and of itself regardless of whether humans exist or not (which is what Paco said in the 2nd paragraph of his "Good Theory": "I want you to try to imagine a universe in which no sentient creatures exist. How much would a “car” be worth?").

Which points put the whole problem with Austrian economics (which is also your main point) : it only works in a world where people aren't made of flesh and bone that must be fed and clothed. In our REAL world, whoever is the furthest economically from destitution ALWAYS has the better bargaining position and can ALWAYS hold out for a better deal, and thus there is NEVER an exchange with both parties "willing participants": one is always MORE extorted BY LIFE to strike a bad deal than the other. "The other" is often a corporation, as corporations are actually NON corporeal (kind of a misnomer there), and thus do not need to consume anything but the lives of their employees.

And that is why "Austrian economics" and "physics" should NEVER be mentioned together in the same sentence except to point out that "with one, you can do stuff" (like annihilate innocent Japanese civilians and American POWs in Hiroshima and Nagasaki), and "with the other one, you can't".

That said, try this for size: nobody (especially including "the Austrians") has come up with a commonsense definition of government that is infinitely scaleable, such as

Government: "One or more persons who claim natural resources, are willing and able to defend their claim on those resources, and make and enforce decisions regarding the allocation of those resources."

Per that definition, EVERY government is the "de facto" owner of everything (including EVERYONE) within its domain (governments subsequently create "de jure" ownership in order to get resources into the hands they believe will be most productive and thus most conducive to the government's prosperity and longevity), and thus no government EVER needs to borrow to fund its operations and to facilitate commerce (except for foreign exchange, a topic we will address at a later date); all it needs to do is to "monetize" the wealth it already owns. Our government's creation of "a monopoly over money" and its relinquishment (to the Federal Reserve central bank in 1913) of the creation of money were due to the fact that the banking industry assumed ownership of the U.S. Federal Government after "We, the People" lost the SECOND American Revolution (usually referred to as "Shays' Rebellion") and have used the U.S. Federal Government ever since to enrich themselves at the expense of everyone else (major corporations and media being "virtual subsidiaries" of the banking industry due to their need for financing to fund their operations), mainly by means of loaning us our own money "at interest", a process which has resulted in the transfer of 95% of the value of the 1913 dollar into the pockets of U.S. Treasury bondholders.

Several things need to happen to address the situation in which we currently find ourselves:

1. Take the printing press back from the U.S. central bank (the Fed), and legalize a "free market" in banking and money while removing all of the government support and protections the banks currently enjoy. The new money will be mainly electronic ("e-bucks", credited to a debit account for every economic entity, as needed), with maybe some 1's (with Tom Paine's picture on them) in circulation.

2. Existing Federal Reserve dollars are to be taken in and credited in the new e-bucks and then used to retire the U.S. National Debt. In order to address the wealth disparity that has resulted from the last 200 years of "banking ownership of everyone else", we may want to limit the amount of Fed dollars we credit from any one particular economic entity (like "Goldman Sachs" or "China"); those enties could either hold on to their Fed dollars or else trade them in via their depositors, shareholders, or citizens by distributing their excess Fed dollars in equal amounts to those entities.

3. Implement a version of Tom Paine's "Agrarian Justice" plan (modified to incorporate the above "commonsense definition of government") by sending every legal resident at least $1000 per month as compensation for their government's impairment of their "right to free access to land". (Minus such a right, a "right to life" is nothing but an empty phrase and a free ticket to "the land of wage slavery".) This compensation should and must replace ALL other forms of corporate and personal welfare and subsidies.

4. Head off inflation by charging an "infrastructure maintenance fee" of up to 1% (but probably much less) on every electronic debit transaction (whatever is required to remove as much money as is being added each month). Eliminate ALL income-based federal taxation (and the IRS as well).

On Oct 27 10:58 AM John Lounsbury wrote:

> Paco - - -
>
> Good article, but I have a philosophical bone to pick.
>
> You wrote:
>
> "Nothing in this universe has intrinsic value; every single thing
> you possess, want to possess, use, can use, have used, can offer,
> have offered, or will offer is valuable only if someone else finds
> it valuable."
>
> You have defined value in terms of exchange. I would argue that is
> too narrow a definition. There are things with intrinsic value independent
> of any medium of exchange. Exchange is merely one way, but not the
> only way, to define value.
>
> I maintain that anything necessary for my existence has intrinsic
> value. Air to breathe, water to drink and food to eat have intrinsic
> value. The value has a binary measurement: either I have these things
> and exist or one is missing and I don't exist.
>
> Most economists make their definitions based on commerce. The basics
> of existence don't come into the equation, except for a few fringe
> operatives who play with things like "happiness indexes".
>
> Ultimately, all of the "commercial" definitions of value are secondary
> to the "existence" definition of value. We lose sight of that and
> many externalities result, which repetitively blow apart the best
> of economic theories. Throughout history societies and civilizations
> have failed because of resource exhaustion. They thrived on commerce
> and decayed on the basis of not sufficiently supporting existence.
>
>
> There absolutely are things with a real intrinsic value.
>
> I know this is outside the scope you intended to address, but I just
> had to have my rant.

Yahoo Gains Respect, Credibility as News Outlet

Just another military-industrial-CIA mouthpiece like EVERY other MSM outlet.

Grantham: Overvalued Markets Due for an Adjustment

You're getting ripped off: milk in Detroit is $1.75 a gallon. And the only ones carrying bags around here are living on the street.


On Oct 28 04:29 PM rennert wrote:

> But here is the latest: People in the Malls are carrying shopping
> bags again. Not 3and 4 bags but 1-3bags.Everyone on my street here
> in Florida is working. No houses for sale on my street either. Milk
> going for $8.50 a gallon. Fed needs to raise at least 1%. That will
> not derail the economy. I can not find a handyman or tree trimmer
> they are all too busy, they have work stacked up for weeks. Fed needs
> to raise Now. Silent Inflation is upon us.

The Greatest Depression Is Coming

Tom Paine came up with the only ACTUALLY decent solution (see "Agrarian Justice" on Wiki) in 1797: compensate everyone equally for the government's impairment of their "right to free access to all land" (That's a slight embellishment, but Paine didn't have the last 200 years of wage slavery to look back on - nor debit cards which can be easily used to avoid having to put the onus of government de facto ownership onto the de jure "private" owners: the principle is identical.)


On Oct 17 09:01 AM logicalthought wrote:

> >>The reason we are in a recession is because... people believed
> that their wealth was increasing and loaded up on debt.<<
>
> Yeah, no kidding. Where your comment gets a little scary is when
> you talk about "social phenomenom that increase consumer capital".
> I don't know what kind of "social phenomenom" you're talking about,
> but the only decent long-term solution to "too much debt" is "spend
> less while you pay it off" or "declare bankruptcy". Either choice
> among consumers will solve the problem, and any OTHER choice will
> just create NEW problems. And as for the banks, instead of creating
> Japanese-style zombies (which is exactly what the Wall Street cronies
> in the Treasury department have done to our banking system), we should
> have crammed all of those banks' debtholders down to common, and
> presto: the balance sheets would have been fixed and the banks would
> be able to lend to creditworthy customers. This is what our disgusting
> Treasury department should have done instead of its Band-Aid bailouts.
>

Smart Guys on Wall Street: The Trillin Theory

Old IT proverb:

"To err is human, but,
to REALLY screw things up,
you need a computer."

A Radical Solution for Healthcare: Kill the Hybrid

You can't pretend to even begin to have a free market in healthcare as long as the AMA, et.al. are constraining the supply of healthcare professionals. So, until you DO have things in place to have an actual free market, the only intelligent thing to do is to treat the entire US population as one big group so we can at least get a decent group rate; in other words, de facto single payer. Just because something CAN be quasi-privatized does not mean that it SHOULD be quasi-privatized. They only care about things getting "socialist" when it is their ox that is getting gored: when the Feds are handing out trillions to the rich people that own banks, they call it "unavoidable". I call it "socialist welfare b.s.". See my recent SA comments for a plan that will fix everything.

Expect a Short-Lived Dollar Rebound

Couldn't you just use a limit order?

Recession Is Over; Depression Has Just Begun

Due to the fact that there will never again be enough jobs to use them as the basis for distributing economic resources (thanks to the ongoing Industrial/Cybernetic Revolution), continual and significant (at least $1000/mo) stimulus directly into accounts established for every legal resident is EXACTLY what EVERY government will have to do from now on. And not just 10+ years but for as long as we want to keep the show going.


On Oct 04 11:08 AM bluesky123 wrote:

> "Koo replies: Until the private sector is finished repairing its
> balance sheets, if the government tries to cut its spending, we’re
> going to fall into the same trap Franklin Roosevelt fell into in
> 1937 (a crushing bear market)."
>
> What does it mean "until the private sector is finished repairing
> its balance sheets"? Where is the line in the sand? Bloomberg said
> recently US household debt dropped from 132% of household income
> to 127%. When are we "finished" repairing our balance sheets - when
> US household debt is 100%, 80%, 60%, no debt at all? The answer to
> this question indicates if deleveraging will take years or decades.
> The government can't keep stimulus going for another 10+ years.

Recession Is Over; Depression Has Just Begun

Sweetie Pie, The banks took over this country in 1789 and gave us a virtual monarchy for a government (even though the faces change and the words all spound good, the result is that the govenment - just like a king - can do whatever it likes to and with its subjects: like make them pay taxes or fight in a war they find unjustified, just like a king can do) and a "Constitution" that would only be interpreted by people who had been appointed by bank stooges (that is, by the bank-funded political parties, figureheaded by the President) to say whatever the banks wanted it to say (like "corporations have the same rights as people" and "the commerce clause lets the government regulate EVERYTHING" and "the general welfare clause lets the government do ANYTHING it wants") and above all to get their hands on a monopoly on our money (which finally would be only created by the creation of a loan on which the banks would charge us interest FOREVER), etc.

THE ACTUAL TRUTH IS: governments are the de facto owner of everything within their domain (all other ownership is "de jure": that is, created by the actual owner, the government) and never need to borrow anything to create money (though they may need to get rid of some in order to keep prices somewhat stable).

THE ACTUAL TRUTH IS: the jobs have been being destroyed for the last 200 years by the destructive technology of the Industrial Revolution, and the Cybernetic Revolution has just about ended the need for amounts of human labor large enough to use "jobs" as the basis of economic resource distribution. The Greatest Depression will continue until a new scheme is implemented (or until the swine/bird/human flu the bastards glommed together in their labs wipes outr enough of the population to get wages up to where the real disease can be hidden again).

THE ACTUAL TRUTH IS: that the real disease is that governments create private property and take away everyone's right to free access to the land without paying compensation for that impairment, a malady that Tom Paine diagnosed in 1797 (see "Agrarian Justice" on Wiki). Today we have the technology to easily pay everyone such compensation and, by so doing, complete the Revolution started in 1776, and end the Greatest Depression at the same time. Until such a plan is implemented, the direction is down.

See my other comments on SA or the profile page of "alan jacquemotte" on classmates.com for details.


On Oct 03 01:27 PM ebworthen wrote:

> Excellent analysis and article - thank you.
>
> It is ironic how we now seem dependent upon government debt spending
> to prevent complete collapse; since the government has indebted future
> generations to address the abuses of private entities and individuals.
> Ouroboros - the snake eating it's own tail.
>
> The pendulum has swung from socialism of the new deal and new society,
> to immoral capitalism of 30-1 leverage on the backs of responsible
> citizens.
>
> Both of these ends of the pendulum have depended upon punishing the
> responsible, either via overtaxation or utilizing the capital of
> individuals for privitized gains and socialized losses - or both.
>
>
> In the past 100 years we have moved from an agrarian society of savers
> to a consumption society of debtors.
>
> At the same time our retirement model from one of land, savings,
> and pensions to one of no land, no savings, bankrupt or exorbitant
> pensions and 401K's subject to the cream skimming and manipulations
> and whims of financial oligarchs and politicians.
>
> On a societal level, in the U.S. and golbally, it will be very difficult
> for us to navigate the immorality of our market and economic conditions
> without armed conflict on a large scale.
>
> The saddest realization from your article is that neither political
> side has gotten it right, and that both have addressed problems with
> solutions that are immoral and unethical band-aids that punish the
> responible and reward the irresponsible for the sake of expediency.

Recession Is Over; Depression Has Just Begun

Since drops work through quicker than rallies, I think your time frame on the nightside is too drawn out.

I have plan that will "get us through the night" as soon as it is implemented. See my other comments or the profile page of "alan jacquemotte" on classmates.com for details..


On Oct 02 02:09 PM Michael Clark wrote:

> You are right, Donald. The global beast will be turning up its roaring
> quite a few notches at this point. In my system of describing this
> phenomena, the point of absolute expansion was 2001. This is where
> contraction BEGAN. It was High Noon, when the world system reached
> its moment of perfection...and popped. The Spirit of Deflation (if
> I can speak of it this way) was tiny, a little seed, overwhelmed
> by the Spirit of Inflation. But from this point Deflation began to
> grow and Inflation began to get weaker. Greenspan-Bernanke represent
> this Spirit of Inflation....but they have been losing strength ever
> since.
>
> Noon is 2001. Dusk is 2010. At Dusk the Spirit of Inflation and the
> Spirit of Deflation will be at equal strength (as the light and the
> shadow are of equal strength at Dusk, the days and nights are of
> equal strength, the Night is rising, the Light is falling)....but
> 2010 indicates the triumph of the Spirit of Deflation. The Darkness
> rises and is in power and will remain in power from 2010 through
> 2028, until the Dawn returns. But the real power of Deflation will
> run from 2010 to 2019. 2019 will be the apex of the Forces of Deflation
> in the same way that 2001 was the apex of the Forces of Expansion.
> The Spirit of Inflation will appear as a seed in 2019 and will begin
> climbing the mountain again, weak at first, but gaining strength
> until 2028, when the Dawn will return, and the future will again
> become light and hopeful.
>
> Spring is the Golden Age, during which time everything seems to work.
>
>
> The credit expansion (1983-2001; 2019-2038) represents a 'filling
> up'; the debt contraction (1965-1983; 2001-2019) represents an 'emptying
> out'.
>
> The darkest period will be 2010-2019.

Recession Is Over; Depression Has Just Begun

Since drops work through quicker than rallies, I think your time frame on the nightside is too drawn out.

I have plan that will "get us through the night" as soon as it is implemented. See my other comments or the profile page of "alan jacquemotte" on classmates.com for details..


On Oct 02 02:09 PM Michael Clark wrote:

> You are right, Donald. The global beast will be turning up its roaring
> quite a few notches at this point. In my system of describing this
> phenomena, the point of absolute expansion was 2001. This is where
> contraction BEGAN. It was High Noon, when the world system reached
> its moment of perfection...and popped. The Spirit of Deflation (if
> I can speak of it this way) was tiny, a little seed, overwhelmed
> by the Spirit of Inflation. But from this point Deflation began to
> grow and Inflation began to get weaker. Greenspan-Bernanke represent
> this Spirit of Inflation....but they have been losing strength ever
> since.
>
> Noon is 2001. Dusk is 2010. At Dusk the Spirit of Inflation and the
> Spirit of Deflation will be at equal strength (as the light and the
> shadow are of equal strength at Dusk, the days and nights are of
> equal strength, the Night is rising, the Light is falling)....but
> 2010 indicates the triumph of the Spirit of Deflation. The Darkness
> rises and is in power and will remain in power from 2010 through
> 2028, until the Dawn returns. But the real power of Deflation will
> run from 2010 to 2019. 2019 will be the apex of the Forces of Deflation
> in the same way that 2001 was the apex of the Forces of Expansion.
> The Spirit of Inflation will appear as a seed in 2019 and will begin
> climbing the mountain again, weak at first, but gaining strength
> until 2028, when the Dawn will return, and the future will again
> become light and hopeful.
>
> Spring is the Golden Age, during which time everything seems to work.
>
>
> The credit expansion (1983-2001; 2019-2038) represents a 'filling
> up'; the debt contraction (1965-1983; 2001-2019) represents an 'emptying
> out'.
>
> The darkest period will be 2010-2019.

Why Gold, If Deflation Is the Threat?

"THINK OF WHAT YOU'RE SAYING,
YOU CAN GET IT WRONG
AND STILL YOU THINK THAT IT'S ALRIGHT..."

The move in gold has been entirely due to dollar weakness, in euros gold has done squat. In a deflationary period (note: in the Detroit area we are getting bigtime deflation in grocery prices, but then we actually have grocery store competition in this region), the value of the dollar will go up, hence, gold will go down. Period. At some point the trends will reverse, but gold could be a lot lower by that time and never get back to these gold prices. In any event, I would not buy gold (or miners) until it at least is making new all-time highs (or is selling for less than $400/oz).

In 2006 I was sending out warnings which compared the current Nasdaq to the Dow of the later 1930's, now I see that analysis all over the place. Upon further cogitation, I have concluded that the 1938 comparison only goes so far (even though the percentage changes of the drop and the snapback rally have been almost identical to the Dow of 1938): the rest of the story is that the market is ALSO going to act like the market of 1930, where the snapback rally was followed by a drop of another 80% from the new "lower high"; the analogy I've been using is that of a rollercoaster, where after the first dip the cars get towed up a big hill to the top of the REALLY BIG DROP!

Now the real fun begins.

Is It Time to Recognize Reality?

While I agree that massive unemployment will be the iceberg that takes this ship down, I believe that instead of a bunch of new rights that government can pretend to maintain while it actually continues to serve the banking industry, what is required is an institution of equal-dollar compensation payments (of at least $1000/month paid in new U.S. non-debt money that must replace the Federal Reserve dollars) to every legal resident; thereafter, housing, healthcare, etc. can be taken care of out-of-pocket.


On Sep 29 12:36 PM John Ryskamp wrote:

> It's the same old analysis, over and over again. What new is there
> to be said? One thing:
>
> He rants about the political system failing to change and continuing
> to turn a blind eye. Why is this happening? Simple. The underemployment
> rate among the politically relevant population--those with a Bachelor's
> degree or higher--is only 10%. These are the people who matter politically,
> and frankly, it isn't that bad for them yet. Just ask them.
>
> Yeah, they're not happy with their stock portfolios or the decline
> in the value of their houses--or a lot of other things. But as long
> as the job is there, the house is there, and the TV is there, you
> will not see THEM get politically active and move for any kind of
> change.
>
> Maybe it's too bad, but then, maybe it won't happen either. Unemployment
> in this class never reached a level high enough during the Depression
> to produce any important policy change--and the country was STILL
> in the depression when the war began.
>
> So if this guy wants to see change, all he has to do is sit around
> and wait until underemployment among the educated class reachs 40%.
> NOTHING will happen at 39.99999999999%.
>
> 40%.
>
> By the way, we are moving from the West Coast Hotel v. Parrish "scrutiny"
> regime--which allowed this catastrophe by denying individually enforceable
> rights and gave the political system nearly all power over the facts
> (blame people themselves for this)--and toward the "maintenance"
> regime I discuss in my book The Eminent Domain Revolt.
>
> You will never see economic activity increase again--NEVER--until
> the scrutiny regime is booted out of power, the maintenance regime
> is put in power, and the New Bill of Rights is enforced.
>
> Enforce it or starve. It's up to you clowns.