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Why Bernanke's Theories on Inflation and Unemployment Are Mistaken

I read the following article, copy and paste for your reference:

"Abstract
Low-rate-of-return projects did not work during the Great Depression. Society should invest in high-return project during high unemployment. However, the rate of return on a project can only be calculated from a solution of value. To predict, prevent, and cure future crises, we need the solution of value to prevent over-valuation. (An Official Statement From Post-Science Institute)
Subject: Knowledge For Current Financial Crisis: Valuation
Society can progress only through the advancement of knowledge. The knowledge advancement for the current financial crisis should be valuation, which can predict, cure, and, most important, prevent future financial crises. Valuation is at the heart of the current financial crisis. We need correct valuation for pricing the troubled assets, which are stopping banks from lending. Funding priorities in the stimulus package should be based on the rate of return on investment, which can only be determined from correct valuation (regulations.gov 4810-25-P). Almost all the real estate appraisal authorities backed our mathematically rigorous solution of value (Patent No. 6,078,901) to solve the S&L Crisis and, more importantly, willing to discard their traditional appraisal method based on the three approaches to appraisal, namely, the market, the income, and the cost approaches. The solution of value had predicted publicly since 1984 the S&L Crisis, after a local appraiser called our office, and it warned the Federal Reserve in June 2006 of the Subprime Woe, just two week before it first flared up. Even if by some random chance we have the current crisis under control, future financial crises will grow bigger and even more fierce. Valuation is the foundation of economics. Useful economics cannot start before the correct solution of value. For the past century, economists have tried to technically solve the problem of value. Mathematicians, such as John von Neuman and Gerard Debreu, help to rigorously define the problem of value. Debreu even produced a qualitative solution for the spatial part of the problem of value, but did the temporal part incorrectly. Other temporal solutions, such as the Black and Schole Model, have just realized that the crux of the problem is in solving the resale price, upon which the price depends. But, the real estate appraisers have known for over 70 years that the key problem of valuation is in determining the resale price. The correct solution of value simply solve the resale price as it solves for the price; the price and all the resale prices to infinity in time satisfies mathematically the same cash flow equation for realistic accounting. Economists need practical experience in formulating the problem of value and mathematical rigor in obtaining an infallible solution. Being mathematically rigorous, the solution of value is a non-violable law of nature in social science, as gravitation is a non-violable law of nature in science. Nature teaches us through punishment by financial crises to learn its non-violable laws of nature, such as the solution of value. In general, the progress of society should be based on knowledge, not just money or politics. In practice, the Federal Reserve can try several commercially available methods of valuation to, once and for all, answer the question: "Except this proposed solution of value, are there other correct solutions of value which can predict and solve financial crises?" Thank you for your consideration.Thank you for your consideration. ### Hugh Ching, Post-Science Institute 2/4/2009 "

Why the Fed Can't Prevent a Deflationary Depression

Fed should get rid of the concept of the national debt (just print money when the government needs money).The worth of a currency of a nation should be based on the wealth of the nation, not gold, silver, or negatively impacted by the national debt.The ultimate success of the stimulus plan depends on this concept of valuing money on national wealth or expected national wealth. For example, at a time of deflation, as we have now, the government should print money to create an inflation, but not to affect the bond market by competing with private business to buy bonds.
Low-rate-of-return projects did not work during the Great Depression. Society should invest in high-return project during high unemployment. However, the rate of return on a project can only be calculated from a solution of value. To predict, prevent, and cure future crises, we need the solution of value to prevent over-valuation. Funding priorities in the stimulus package should be based on the rate of return on investment, which can only be determined from correct valuation(regulations.gov 4810-25-P or search hugh ching).
Economists need practical experience in formulating the problem of value and mathematical rigor in obtaining an infallible solution. Being mathematically rigorous, the solution of value is a non-violable law of nature in social science, as gravitation is a non-violable law of nature in science. Nature teaches us through punishment by financial crises to learn its non-violable laws of nature, such as the solution of value. In general, the progress of society should be based on knowledge, not just money or politics.

Whose Fault Is the Global Crisis?

I copy and paste the following quote for your reading and thinking:

"The Cause And The Cure Of World-Wide Financial Crises?
on-Violable Laws Of ature In Social Science Vs. Man-Made Laws
No one wants to CHANGE the current value-absent scientific
culture more than members of Post-Science Institute. Of all the
CHANGES WE NEED, the first, the most important, and the most
urgent is the way that the current society determines value. The
solution of value is an non-violable law of nature in social science.
Other possible non-violable laws of nature in economics affecting
the current financial crisis are the Finite Spreadsheet Instability and
the Quantity Theory Of Money PQ = VM. Nature teaches us laws
of nature through punishment by financial crises.
Free market championed by Milton Friedman might function better than a market regulation by man-made laws, but free market is only free within the limit set by the non-violable laws of nature in social science.
Friedman with the quantity equation of money (PQ=VM) could have save our current economy from another possible Great Depression. The equation Price x Quantity = Velocity of Circulation of Money x Money Supply (PQ=VM) requires that the circulation and the supply of money be kept up with the gross national product. The equation, after further examination, could be another important law of nature in social science, while the problem of excessive national debt, which is a man-made, self-imposed financial discipline, is hardly noted during the current crisis......
To behave as a private investor with nearly unlimited funding, the US government for long-term consideration should decide its priorities in terms of the expected rate of return. Capitalism must survive through continual innovations (>100% rate of return). Mankind gets about one major innovation in a generation or 25 years. The most recent two are the PC Revolution based on the microprocessor and the Internet.
Money matters, but is not everything. The left side of the equation PQ in PQ=VM plays equally important role. Our current crisis is also caused by the decrease in PQ after the low-tech housing industry, which is used to fill up the vacuum left in the economy after the crash of the Internet industry, can no longer sustain the economy.

The market comparison method in real estate or actuarial analysis in insurance is just the blind following the blind until everyone falls off a cliff in a financial crisis. The fall of AIG should be ample proof that actuarial analysis does not work for insuring MBS.
Incorrect solutions of value create irrational market participants. Irrational market participants produce incorrect market prices. Incorrect market prices cause financial crises. Conversely, correct solutions of value creates rational market participants and correct market prices. When all market participants, including the government, use correct solutions of value, most past, present, and future
financial crises should be predictable and avoidable."

It seems no one's fault. It is just that all government must observe the non-violable law of nature in the form of the solution of value.

The entire article can be found at Treasury department Guarantee Program for Troubled Assets comments, search, hugh ching
www.regulations.gov/se...

Mortgage 'Cram Downs' Quickest Route to CDO, MBS Price Discovery

I copy and paste the following quote for your reading and thinking:

"The Cause And The Cure World-Wide Financial Crises?
on-Violable Laws Of ature In Social Science Vs. Man-Made Laws.

It should be perfectly clear to everyone by now that the crisis
occurs because THE PRICE IS WRONG! The incorrect solution
of value is the cause of most and the current financial crises, and
the correct solution of value is the cure.
No one wants to CHANGE the current value-absent scientific
culture more than members of Post-Science Institute. Of all the
CHANGES WE NEED, the first, the most important, and the most
urgent is the way that the current society determines value. The
solution of value is an non-violable law of nature in social science.
Other possible non-violable laws of nature in economics affecting
the current financial crisis are the Finite Spreadsheet Instability and
the Quantity Theory Of Money PQ = VM. Nature teaches us laws
of nature through punishment by financial crises.
Full disclosure is an important and practical characteristic in price determination. Full disclosure should include the methodology of calculation and all the inputs to infinity as well as the output. Government regulations on valuation should include
the requirement of full disclosure, which will enable full accountability in the future.In fact, the whole process of price determination is to relate the price and all the factors affecting the price from now to the infinite future in a mathematically rigorous fashion. When it is mathematically rigorous, the solution of value is a non-violable law of nature in social science, as non-violable as mathematics.
Free market championed by Milton Friedman might function better than a market regulation by man-made laws, but free market is only free within the limit set by the non-violable laws of nature in social science.
Paul Samuelson initiated the descriptive mathematical approach in economics. Mere description of a problem, regardless whether the language is English or mathematics, would still leave the problem unsolved. Debreu, at least,solved the spatial dependence of the problem of value with a structural approach involving the fixed point theorem. And his mathematical description using set theory has
greatly clarified the problem of value."
Please ask these two questions to our lawmakers, judges, economists the following two questions:
"(1) How much does the price of a mortgaged real estate increase with 1% decrease in mortgage interest rate?
(2) What is the expected rate of return on investment of small business?"

Money or Power may offer temporary relief for our economic pain,
but only knowledge can provide permanent solutions and real progress to our society.

Mortgage 'Cram Downs' Quickest Route to CDO, MBS Price Discovery

I copy and paste the following quote for your reading:

"The Cause And The Cure Of World-Wide Financial Crises?
on-Violable Laws Of ature In Social Science Vs. Man-Made Laws

It should be perfectly clear to everyone by now that the crisis
occurs because THE PRICE IS WRONG! The incorrect solution
of value is the cause of most and the current financial crises, and
the correct solution of value is the cure.
No one wants to CHANGE the current value-absent scientific
culture more than members of Post-Science Institute. Of all the
CHANGES WE NEED, the first, the most important, and the most
urgent is the way that the current society determines value. The
solution of value is an non-violable law of nature in social science.
Other possible non-violable laws of nature in economics affecting
the current financial crisis are the Finite Spreadsheet Instability and
the Quantity Theory Of Money PQ = VM. Nature teaches us laws
of nature through punishment by financial crises."