Monday, February 7, 2011
Modern World View and Financial Crises Related Blogs
Since the financial crises started in 2008 I have been reading and analyzing ideas proposed in many financial blogs (and specially the reader comments). The general sentiment in the reader comments is:
Readers are an increasingly jaded audience bored to death with keynes vs hayek, goldbuggery and peak-everything doomerism.
It seems to me that modern Darwinian world view plus our current set of global problems has led many, many westerners (and also many, many non-westerners) to come to the conclusion that:
“we were not the brightest of monkeys!”
But I for one does believe that we can solve our most difficult global problems without annihilating ourselves by using our faculty which distinguishes us the most from the rest of the animal kingdom: The ability to think not only rationally but also very creatively. The message I have for my fellow westerners is the following:
“we are the most blessed of monkeys!”
Here is how the banker's game works:
1) Get the government to issue some currency (cash -- paper or reserves at the central bank -- reserves are government issued cash central bank deposits). Government issued cash is around 5% of the currency (money) supply. The government issued currency is put into circulation by the government simply spending it.
2) The rest (95%) of the currency is issued by the private banks. Each customer loan is a new bank deposit (i.e., new currency) and increases the currency (money) supply of the economy. Note that this newly created money (currency) is put into circulation by the borrower spending it. Most currency (about 95% America's currency supply) has been borrowed into existence and when bank customer pays the loan back that amount of currency is removed from circulation. The banking system cannot go backwards (fewer net loans) as time moves on because fewer net loans means fewer currency in circulation in the economy.
Accumulation of interest charges on outstanding loans means that the currency supply must constantly increase even if it means giving out lower quality loans. Think of it like a plane flying it must fly at some minimum speed or else the plane (the banking system) will crash (i.e., banking system collapse).
3) The bankers make dam sure that the common public does not understand how the monetary system works meaning that the private banks issue 95% of the currency. This is whole another topic how they do this.
4) The system works until real economic capacity of the economy grows and debts can be serviced and interest charges paid. Most of the time the economy oscillates between boom (growth) and bust (recession) because bust is needed to clear debts and start a new lending cycle.
5) Eventually, one of these cycles goes so deep that currency supply (and demand) falls so low that too many debts become un-serviceable. The recession becomes a depression now.
6) The bankers then have to decide how to "reset" the system. One way to reset the system is to let the depression takes its course. But of course this path is very chaotic because people lose jobs and may become violent. Once most debts are cleared lending can start again and the currency supply is replenished. Wars are a good way to get initial money (currency) into an economy after a depression to get demand going again. This is the great depression scenario.
7) Another way to "reset" the system is to get the government to print too much money and spend and destroy the currency and blame it on the government. This justifies issuance of a totally new currency (note that hyperinflation clears debts) and the lending cycle can start again.
8) The banking system (as is) is setup to maximize the power and influence of the global bankers and NOT for the maximum general well being of people. By the way this is a global game. This is the only system around no matter what country you are in. The global banking cartel makes sure that no competing systems are allowed to exist (so they might be copied and global bankers will lose power).
9) We need a currency system where money is spent into existence and does not need to be lent into existence so the economy is never starved of currency in circulation.
For more details on this stuff please read the following articles in order listed below:
http://seekingalpha.com/article/209386-modern-monetary-system-there-is-another-way
http://aquinums-razor.blogspot.com/2011/08/what-is-relationship-of-money-to.html
http://aquinums-razor.blogspot.com/2010/07/why-is-deflation-and-depression.html
http://seekingalpha.com/article/210346-should-newly-created-money-be-a-private-or-a-public-asset
http://seekingalpha.com/article/192375-cause-of-today-s-economic-crises-too-much-thrift
http://seekingalpha.com/article/160269-a-radical-solution-for-america-s-insolvent-financial-system
http://seekingalpha.com/article/146658-great-banking-confusion-is-there-a-better-way
Mansoor H. Khan
http://aquinums-razor.blogspot.com/
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274 comments:
«Oldest ‹Older 1 – 200 of 274 Newer› Newest»Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/02/05/feeling-me-feeling-you-ah-ha/#comment-192
Scepticus,
“there is no real self independent of an aloof from other human beings, inspecting the world and inspectnig other people. You are in fact connected not just by facebook and the internet, but actually, quite literally connected by your neurons. And theres whole chanis our nerons [mirro nurons] round this room talking to each other and there is no real distinctiveness between your conciousness and somebody else’s conciousness.”
I disagree with the above statement!
If we are just reflecting each other then how do you explain our parabolic cultural evolution which rests on insights and teachings of giants of history (Socrates, Newton, Darwin, Einstein, Keynes, The Prophets, The giants of mathematics, The giant artists, etc.)?
There is something really different about neurons of a select few people. But I agree the rest of us are more or less reflecting and refining the reflections of neurons of these giants of history.
Mansoor
http://liminalhack.wordpress.com/2011/01/27/inflation-everywhere/#comment-182
Also, other very critical scarce resources are human creativity and world peace. More of these are very likely to help us resolve “peak oil” and increase crop yield much more. If you have ever flown over the continental USA you will find vast tracts of land still un-inhabited and un-farmed. I don’t think we should focus so much on reducing population growth but how to encourage human creativity and achieve world peace.
Every Malthusian thinker of the past thousand years has been proven wrong (so far) and inshallah they will be proven wrong in the next thousand years as well.
Mansoor
Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/01/18/the-master-and-his-emmissary/#comment-183
Anon sounds very much like YHWH or ALLAH. My mother has been answering some of my left brain oriented questions all my life with the statement: “Your brain is much to small to comprehend the creator and/or the creation in entirety”.
http://liminalhack.wordpress.com/2010/12/19/my-god-its-full-of-stars/#comment-199
Scepticus said:
“Presumably you are referring in general terms to the separation of church and state? And with respect to current times, the issue at hand is the dichotomy between corporate/market and state power?”
All dichotomies must ultimately resolve and reconcile with each other at some level. Everything must “map” back to reality and truth at some level. Dichotomies help us manage the universe around us. Dichotomies like God/Man , Man/Nature, Church/State, Heaven/Hell, Work/Play, Worship/Sin, Good/Evil, State/Free Market, Truth/Lie, Birth/Death, This Life/Next Life, Soul/Body, Friend/Enemy simplify in our minds the complex universe and help us manage the affairs of our life.
I believe all dichotomies are ultimately resolved and reconciled in the mind of the creator of the universe (but for the most part exactly how it is resolved and reconciled at least I don’t get and don’t know).
The acid test of any model in any sphere of human activity (including spirituality) is whether the application of the model leads to a better situation (i.e., leads to a better result as far as managing our affairs in a overall way). If it does then the model is in accordance with reality and truth (yes… I am making an assumption here that better result = Reality = Truth = more satisfying life = a more fun life overall = more happy life overall = good = a desirable situation).
You can view the above statement as a “generalized form of the scientific method” to test models which cannot directly be tested in a laboratory as in the physical sciences.
Any re-balancing of Corporate/Free Market and State Power must pass this acid test over long periods of time.
I don’t think the above is a new idea. It is implicit our normal discussions, debates and arguments.
Mansoor H. Khan
Below are some comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2010/11/30/liminality-part-ii/#comment-186
Scepticus:
You said:
“Once one has discarded contemporary morality, economic assumptions and shed the collective delusions of the age past, what then can one utilise to analyse the future?”
We should start with the physical reality like hunger:
1. How will I get my next meal? My meals 1 year from now? My meals 10 years from now? My meals 20 years from now?
2. Same question as number one for other material needs (water, shelter, sex, warmth, health, physical security)
3. Desire for high social status!
4. Desire to express my individuality via language and art. Number 3 and number 4 are closely related.
5. Desire to procreate. This is a way of “defeating” death which has worked quite well so far.
6. Desire to unravel the mysteries all around us and conquer nature leading us to create better production processes, science, engineering and better technology.
We should then come up with models which fit the data (i.e., history) but offer (possibly) better ways of managing the “physical reality” described above. Just like the “Newtonian model” was superseded by “Einsteinian model” of the universe. But the “”Einsteinian model” had to explain the “existing engineering based on Newtonian physics” just as accurately as the does Newtonian physics.
In order words any model we come up with must be consistent with documented and known human behavior and documented and known human psychology.
I agree all “isms” are on the operating table at the point!
Mansoor Khan
http://liminalhack.wordpress.com/2010/11/23/let-there-be-a-blog-called-liminal-hack/#comment-185
Scepticus:
You said: “What aspects of your current conciousness would remain intact, and how differently would you interact with fellow humans and nature and language if you were alive in these prior ages? What would you gain and what would you lose?”
All aspects of the current consciousness which have to do with the following would remain intact:
1. How will I get my next meal? My meals 1 year from now? My meals 10 years from now? My meals 20 years from now?
2. Same question as number one for other material needs (water, shelter, sex, warmth, health, physical security)
3. Desire for high social status!
4. Desire to express my individuality via language and art. Number 3 and number 4 are closely related.
5. Desire to procreate. This is a way of “defeating” death which has worked quite well so far.
6. Desire to unravel the mysteries all around and conquer nature leading us to create better production processes, science, engineering and better technologies.
A major aspect missing from current consciousness which was present historically but is today mostly absent (and has been absent since the industrial revolution, at least in the west) is:
1. Some of kind of belief in a mystical power who controls the stuff not under man’s control.
2. Closely related to number 1 above is that modern mental model of the universe assumes that humans have no ultimate special place or position in the universe (the natural selection mental model of the universe which emphasizes “randomness” rather than “order”).
Mansoor
http://liminalhack.wordpress.com/2010/11/23/let-there-be-a-blog-called-liminal-hack/#comment-198
Scepticus said:
“Truth is but a word in a language and signifies only other words”
But truth is more than words also. Because words relate and are used in place of real things like people, places, objects, events and processes.
So Truth = Words = Words are used to refer to real stuff
Therefore: Truth = Real Stuff = Reality = What actually is “going on” or What actually the “case is”
Mansoor H. Khan
Below are some comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2010/11/14/life-in-the-matrix/#comment-200
Scepticus:
you said:
“*1 : of course some people do ignore it all. Us ‘red-pill’ types denigrate them as ‘sheeple‘ or ‘joe six pack‘. But in the world in which the watched pot never seems to boil, who is going to have the last laugh?”
Exactly. ‘sheeple‘ or ‘joe six pack‘ has the last laugh. Even in terms of the Darwinian natural selection model ‘sheeple‘ or ‘joe six pack‘ are more numerous (per couple they have more kids and of course in aggregate there are a lot more of them then the “red-pill” types). “More off spring” was Darwin’s criteria for success. Therefore per Darwin ‘sheeple‘ or ‘joe six pack‘ are the “fittest”.
When I made this observation to my sister-in-law (she is very status conscious) she suggested that the quality of the offspring matters. I then reminded her that per Darwin the only qualifier was the the offspring are able to reproduce. She was not convinced!
Mansoor H. Khan
Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
1)http://liminalhack.wordpress.com/2011/02/07/copycats/#comment-201
Scepticus,
You Said:
“McGhilchrist observes that early on in a culture’s development (e.g. Greek, Roman, Post Renaissance Western ), a balance between the hemispheric modes of processing creates genuinely innovative and vibrant cultural progress”
Is McGhilchrist claiming that western society is not creating “genuinely innovative and vibrant cultural progress”?
Here is how I see the requirements for “genuinely innovative and vibrant cultural progress”
1. Right brain’s goal should be infinity (eternal life, eternal peace, infinite knowledge, eternal harmony, infinite beauty, infinite love, infinite abundance of everything good, infinite justice, etc.)
2. The Left brain should serve the above goal the best it can in this material world. As our knowledge increases (of course the right brain and left brain work together to increase knowledge). But it is the right brain which comes up with new ideas/models and the left brain performs the laboratory experiment to determine if the new idea will achieve the goal (point number #1 above). The left brain is the “implementer”. The right brain is however the judge and judges if the “new construction” in the material world has come a step closer to the goal stated in point number one above.
3. For proper “motivation” the right brain must believe that #1 is possible! It must envision heaven and really believe it exists.
4. The right brain knows that the goal cannot be reached in this world but that is ok because death is just a “phase transition”.
Mansoor
http://liminalhack.wordpress.com/2011/02/06/devils-advocate/#comment-193
Here is how I see the left/right stuff:
Left:
1. Logical and Disciplined
2. Helps us to deal with the material world (hunger, need for water, shelter, etc.)
3. Embodies Discipline (the goods and services production process, the Judicial System, the Military)
4. Embodies physics and physical laws
5. Uses strict hierarchy
6. This is the focus of the old testament (eye for an eye!)
7. Symbolized by the Roman Empire and focus of Greek thought
8. Symbolized by the state (as opposed to the individual!)
9. Embodies submission and compliance (Opposite of freedom!)
10. Cold, strict and impersonal (opposite of warm, flexible and forgiving!)
11. Focuses on this life (as opposed to a possible after life!)
12. Has a difficult time with coming up with new models or theories or ways of solving problems
13. The left brain will take a civilization over a cliff when the civilization encounters a problem requiring adjustment to the models executing (like a computer executes code) in the left brain if not restrained by the more “flexible” right brain
Right:
1. Creative and Imaginative and Artistic
2. Able to come up with fresh approaches, new models and new theories and new ways of thinking about the natural world
3. Embodies emotion (love and hate), falling in love, patriotism, empathy, motivation
4. Is able to increase the spirit, the desire to live, the desire to fight, the desire to carry on
5. Is able to conceive of infinity (in time and space) and even in power (able to conceive omnipotence)
6. Wants to procreate (one way to defeat death in a sense!)
7. This is the focus of the New Testament (mercy and forgiveness!)
8. Symbolized by the Persian Empire and focus of much of eastern thought
9. Focuses on the individual and freedom of the individual
10. Is in control of person’s free will
11. Is able to conceive of and focus on after life
I will go a step further and say that:
It is the right brain which guides and teaches the left brain. But left helps to keep the right nourished and healthy on the physical level.
Mansoor H. Khan
Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/02/13/the-social-evils-of-liquidity/#comment-207
Scepticus Said:
“Increased trade erases or reconfigures traditions by intermixing different cultures, languages, social structures and so on. The only result of this can be that some traditions and social structures fall by the wayside.”
Exactly! To be more precise the good and useful portion of any “traditions and social structures” will be retained by both sides and the less useful and problematic portions will “fall by the wayside” as you said. Think of the “good” as being absorbed into a “greater good”. The “greater good” is of course created by the process of “merging the two”.
Note that this idea is thousands of years old. In Brahmanism of India some sects believe that all other hindu gods (like Krishna, Shiva, Ram etc.) will one day be absorbed into “Brahma”.
Of course this will occur only if we don’t annihilate ourselves in this “merge” process which still has a long, long way to go. The end result of this merge is your “monoculture” idea. I see this “merge” happening here is America at warp speed. Of course, America is a special case. Its whole basis about “merging”.
It is however causing a great deal of economic stress and anxiety in America due to the global wage arbitrage. Here are my specific policy recommendations for America to deal with this issue right away in a concrete way:
We need to put income in the hands of consumers to combat global wage arbitrage. Global wage arbitrage tends to be deflationary. The federal government simply needs to print newly created money and:
a) create a massive jobs program
b) greatly increase aid to states and municipalities
c) greatly increase jobless benefits (amount of benefit and length of time) and extend COBRA benefits to 5 years
d) issue a $500 per month per citizen national dividend
And only if the above policies cause inflation, tax the rich.
Mansoor
Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/02/13/the-social-evils-of-liquidity/#comment-223
My original comment was something like this:
Is this start of a world government which most fear so much?
I actually don’t fear. IMO better defined international rules would be very useful.
I explain to people this idea as follows:
Long, long time ago before automobiles were in widespread use there were no traffic laws (maybe some conventions and standards people voluntarily followed). But no police patrolling the roads or any kind of driver licensing, ownership registration and license plate display requirements.
As use of automobiles increased there arose problems (i.e., too many accidents, etc). In response all the appratus for managing this aspect of our lives was created (demanded by the populace is a better way to say it).
In the same way world government can help us deal with such issues as:
1. Proliferation of weapons of mass destruction.
2. Human trafficking and child labor
3. Attempts by nations to expand territorially
4. Cruel despotic rulers
5. Pollution control
6. Diversion of rivers away from the “other” nations for the benefit of one doing the diverting
7. Dealing with criminals who cross national borders to escape prosecution
Mansoor
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=138995&view=findpost&p=2901289
Scepticus,
It has been a while since we discussed this (negative interest rates). This still bothers me. You have suggested this as a way to balance supply and demand (i.e., deal with deflation). So, this is a way to put pressure on money holders to "spend" their money sooner rather than later. correct?
However, in the modern world due to longer life spans (and with it much longer portion of life where the individual is not expecting and/or able to work) and given the very high level of specialization (which makes replacing ones job much harder after a job loss) and inability to rely on other family members for financial support (due to change of traditions) the propensity to save (in general globally--maybe not in UK) is very high. In other words money holders are trying to "save" for bad times and retirement much more than they ever did in the history of the world.
Why not do the following (the focus of the following recommendations is to build increased production capacity for the future and have an implicit social contract which promises that "future production capacity" will be "shared" to insure social stability). The central government can print money and:
1. Build infrastructure to reduce business costs and commute times so future workers and businesses will be more productive.
2. Invest in education and training and increase the "creativeness" of current and the next generation of workers.
I realize the extra newly printed money can come back as inflation in the far future. But this can happen anyway. It all depends on future productive capacity of society. If there is too much inflation the government can tax and destroy money to bring inflation in check.
Mansoor H. Khan
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=159571&view=findpost&p=2901282
Scepticus,
Do you really mean debt or what you mean is a claim on real produciton?
Consider the following hypothetical monetary system:
1) 100% reserve -- no Fractional Reserves allowed.
2) Deflation is handled by creating more 100% reserve money and giving social credit up to the point where very low inflation is observed. Note, I am not saying 100% of purchasing power is given to the public via social credit. Only enough to achieve very low inflation and no deflation.
3) If inflation is observed social credit is reduced or discontinued. If inflation is still an issue taxation is introduced to destroy purchasing power.
4) In such a system there would be no debt. But money holders would still have claim a on future production of society via enforcement of legal tender laws and taxation.
Is such a system viable in your opinion?
Mansoor H. Khan
Below are some more comments I have made as a response to various blogposts:
http://seekingalpha.com/author/mansoor-h-khan/comment/1480311
Kimball,
Your article has an implicit false assumption. The government does NOT need to tax the rich in order to re-distribute purchasing power. We can simply ask/inspire the rich to not "spend" much of their earnings and leave it in the banking system. The government can then simply print and hand out purchasing power via a monthly national dividend for each citizen.
Why is this a better way? Think of the bank balance of the rich as "score keeping". Which has social value because it motivates people (a good thing!).
Also, those very high income earners who don't buy into "spending less" on themselves will not resist re-distribution via this method since it will NOT impact them negatively. These people will not finance the likes of Rush Limbaugh to spread false ideas in order to "keep" their money.
The ball to keep an eye on is inflation! If inflation rate is more than target and still more redistribution is needed for social stability then explicit taxation will be required to tame inflation.
Mansoor H. Khan
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=159571&view=findpost&p=2901754
Not exactly. I believe in right and wrong and collectively deciding on right and wrong:
right = leads to an overall most peaceful, fun and fulfilling life possible
wrong= leads to the OPPOSITE of an overall most peaceful, fun and fulfilling life possible
That is where we differ. I believe TRUTH exists. Hard to find but exists.
Violence is good and ok to achieve "right". The right must be decided collectively.
Can the collective screw up? Yes.
But mostly humanity has been marching toward the truth overall, again my proof:
"Today's 6.5 billions humans alive (with Malthus turning in his grave) with more material production per capita than ever dreamed of I say we are doing pretty good materially at least."
Mansoor
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=159571&view=findpost&p=2901695
There is another very practical way to look at it. If in any given system most end up being morons. The system itself is moronic. Then the system itself should be redesigned.
We can do better than just: "and that's that". Again, if most are behaving in such a way that the results are moronic then our basic assumptions are moronic and we need a change in way of thinking about ourselves and others.
Today's 6.5 billions humans alive (with Malthus turning in his grave) with more material production per capita than ever dreamed of I say we are doing pretty good materially at least.
Mansoor
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=159571&view=findpost&p=2901743
No. I grew up in Pakistan (to age of 13 before coming to America) and know firsthand the disaster anarchy leads to. Japan is way, way, way much better than what I saw in Pakistan.
But anyway. Let us focus on Germany. You say "evil system of extortion". Germany is a democracy. Is it not?
Germany is the best example I have seen of a society in the modern world which is highly disciplined and ordered yet quiet creative. Granted, Britain has been probably more creative in the past and I see mostly a rudderless Britain now.
What is needed is a cross between the Britain of 1700 to 1960 (very creative) to a Germany of today (highly disciplined and ordered and aware of connectedness of members of society).
Mansoor
Below are some more comments I have made as a response to various blogposts:
Theory of knowledge and reality according to Mahayana Buddhism is as follows (roughly):
a. Beliefs generate thoughts
b. thoughts generate action
c. actions create our reality
d. there is a feedback loop as perceived reality modifies beliefs
e. rinse and repeat (as you would say)
The above model (I believe) is more or less consistent with modern science.
Where Buddhism adds value is as follows:
1. According to the buddha human beings are flesh, bones, tendon, hair, etc. + thoughts + beliefs
2. Note number 1 above does not contain any idea of a continuing self or a “soul” or anything like that
3. The belief in “I” independent of what has been stated in number 1 above is a “false” concept of our minds. It is the creation of the mind.
4. We should conceive of ourselves as machines “thinking” and no more than that (no soul or “I” really exists apart from the body and thoughts and beliefs).
5. Belief in soul or “I” independent of what has been stated in point 1 above is a sign of a confused mind. This confusion is the cause of all un-happiness.
6. Through proper understanding of operations of the mind, meditation and reflection this confusion can end.
7. The end of this confusion is “perfect knowledge” about oneself and removes the possibility of pain or suffering resulting in perfect bliss (nirvana).
The buddha lived around 500 BC in northern india.
By the way I don't accept this model at all. My heart feels heart too easily to not believe in a soul. I am way to emotional to think of myself as a "machine only".
Mansoor
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=159571&view=findpost&p=2901754
Not exactly. I believe in right and wrong and collectively deciding on right and wrong:
right = leads to an overall most peaceful, fun and fulfilling life possible
wrong= leads to the OPPOSITE of an overall most peaceful, fun and fulfilling life possible
That is where we differ. I believe TRUTH exists. Hard to find but exists.
Violence is good and ok to achieve "right". The right must be decided collectively.
Can the collective screw up? Yes.
But mostly humanity has been marching toward the truth overall, again my proof:
"Today's 6.5 billions humans alive (with Malthus turning in his grave) with more material production per capita than ever dreamed of I say we are doing pretty good materially at least."
Below are some more comments I have made as a response to various blogposts:
http://mises.org/Community/forums/p/15020/312938.aspx#312938
One other way to (possibly) get out of a deflationary spiral is to un-centralize the society. That is, remove, legal tender laws and allow private money to exist. Of course, it becomes much, much harder for the government to collect taxes. But lets put that aside for the moment. Would it even work otherwise? How would existing contracts written in USD be handled/adjudicated? My creditors are all over the country. In what currency would they be paid in? Also, over long period of time consolidation of currencies will begin according to gresham's law and you will again end up with one currency. Back to square one.
Below are some more comments I have made as a response to various blogposts:
http://liminalhack.wordpress.com/2011/02/16/the-parable-of-the-amazing-warehouse/#comment-304
Scepticus,
Given all these issues with maturity transformation via debt-based money (i.e., FRB).
Why not just use the good old way of maturity transformation:
common equity stock
it seems to me that common stock mode of financing is able to turn “small” pools of capital into large pools of capital for long term very large projects. And any portion of the investment can be “traded” and turned liquid if needed by the owner.
What is the advantage of FRB over common stock for maturity transformation purposes?
Is the main point of FRB maturity transformation?
Is the main point of maturity transformation to “collect” small pools of capital into large pools and be able to liquidate part of the pool before project completion (if necessary)?
Mansoor
Very interesting video clip:
http://www.myspace.com/video/perunapete/moses-parting-the-red-sea/31824277
Surah 26: Al-Shu'ara' (The Poets) in versus 60-67
"Strike the sea with thy rod." So it divided, and each separate part become like the huge, firm mass of a mountain.
“Strike the sea with your staff.” The sea then parted and became like a huge, firm mass of a mountain.
What is Capital?
Since the Lehman Brothers, Inc. collapse I have noticed that the term "capitalism" gets thrown around in emotionally charged discussions. In these discussions and debates participants never define the term and assume we all know what it means.
Therefore I came up with a very practical, clear and precise definition of capital.
My definition will be by way of an example. The example is of a baker living in a Gaithersburg, Maryland who owns bread making factories and sells bread locally and nationally to supermarkets and other vendors.
1) Bread Making Factory = Capital Good = Capital (Not easily sellable as loaves of bread are but it is still obviously something of value, the baker cannot make loaves of bread as fast without it)
2) Bread = Product produced by the factory = Capital (Something of value, sellable or exchangeable into dollars)
3) Dollars = Money = Capital (most easily convertible to labor hours and raw materials needed by the baker's factory)
4) Baker's Knowledge of Making good Bread = Capital (the better his knowledge and management skills the more efficiently and higher quality bread will be made)
5) Baker's Reputation of Making good Bread = Capital (Reputation facilitates trade and helps to get his bread to those who desire such things faster, better and cheaper than it would otherwise)
6) Baker's Good health and Baker's workers good health = Capital (I am assuming that cost of keeping the baker and his workers in good health does not exceed the value of profit created by selling the bread, note I am not specifying exactly how the good health is achieved)
7) A well functioning un-manipulated marketplace (from bakers point of view) = Capital = The baker must know how much bread to produce and how much to charge and he also needs a marketplace to make the exchange (receive dollars for his bread). The baker also learns about what other bakers are producing (in terms of quality) and he can use this information to at least try to keep up with other bakers. So marketplace = Source of knowledge and Information = Capital.
8) A well functioning un-manipulated marketplace (from consumer point of view) = Capital = The consumers need a place to go and exchange dollars for bread. The consumers would like to get the most out of their exchange. This occurs mostly via competition among bakers as they try to keep up or out do each other with respect to the quality and price of loaves of bread. Again market place = source of knowledge / information about what is going on with respect to loaves of bread = Capital.
9) Baker's charity toward the local poor = Capital (raises the spirit of the baker and the community, you are smart enough to figure out why, also probably lowers crime).
10) Baker's contribution to the local university = Capital (also raises the spirit of the baker and the community, again, you are smart enough to figure out why, produces a better more creative workforce for the baker's factories), a workforce with a better knowledge is more creative and can think of more ways to improve the bread making and bread distribution process.
11) Protection of the Bread Maker's factories provided by the local police = Capital (I am assuming that taxes are not so high that they outweigh the benefit that is received by lowered risk of loss due to potential theft and vandalism).
12) Local police's ability to work with other police departments and state police to catch criminals who escape the reach of the local police = Capital (again, I am assuming that taxes are not so high that they outweigh the benefit that is received by lowered the risk of loss due to potential theft and vandalism).
Last comment continued:
13) FBI (or equivalent thereof) = Capital (catch sophisticated and well organized criminals and cheaters and thugs and terrorists who can disrupt the bread making and the marketplace processes discussed above).
14) Military = Capital (Protection against international aggressors and thugs and enslavers and criminals who would screw the bakers in the land, take his bread and bread making factories, again if the cost is too high then this service may not be worth it).
15) A well functioning executive, judicial and legislative bodies to manage the various institutions of the land (like the military and the courts) and monitor large scale sophisticated cheating in the marketplace = Capital. Again if this service becomes too expensive then it is not worth it and actually becomes an impediment to the bread makers and consumers of bread.
16) Good relations with other nations and international peace = Capital (Baker's output - loaves of bread can be traded for BMWs)
Based on this definition of Capital, what is capitalism?
Mansoor H. Khan
A very interesting article from PIMCO's Bill Gross. The bottom line is that we need new Keynes!
http://seekingalpha.com/article/250390-pimco-s-bill-gross-the-devil-s-bargain-of-record-corporate-profits
Mansoor
elow are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/02/27/is-there-anybody-out-there/#comment-307
Scepticus,
“The World Needs to Be Taught A lesson. ”
A better (non-religious) way of saying the same thing is that:
“Nature abhors imbalance and injustice”
For example, imbalance of electrical charges in the clouds vs. the earth’s surface will lead to lightning and thunder. Too much imbalance in social relations (too many people starving while many living in luxury in the same community) usually leads to violence and war. Taking of too many wrong risks causes a financial system to collapse, etc.
At least this model does not require a personal god distinct from nature. However, this model also does not preclude a personal god. A personal god would have created these laws of “balance” if you believe in one (as I do).
Therefore our job is to discover these laws of balance in nature (physics and chemistry) and in humans (economics, psychology) and use them to try to achieve our goal of maximum peace, fulfillment, fun and material comforts based on what these laws tell us.
Mansoor
Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/02/16/the-parable-of-the-amazing-warehouse/#comment-304
Scepticus,
Given all these issues with maturity transformation via debt-based money (i.e., FRB).
Why not just use the good old way of maturity transformation:
common equity stock
it seems to me that common stock mode of financing is able to turn “small” pools of capital into large pools of capital for long term very large projects. And any portion of the investment can be “traded” and turned liquid if needed by the owner.
What is the advantage of FRB over common stock for maturity transformation purposes?
Is the main point of FRB maturity transformation?
Is the main point of maturity transformation to “collect” small pools of capital into large pools and be able to liquidate part of the pool before project completion (if necessary)?
Mansoor
Reply
liminalhack says:
27/02/2011 at 10:37 pm
“Why not just use the good old way of maturity transformation: common equity stock”
Well I do think equity will supplant debt as the preferred store of value in the coming decades. It is now a better store of value.
“What is the advantage of FRB over common stock for maturity transformation purposes? Is the main point of FRB maturity transformation?”
There is not so much advantage in bank maturity transformation once equity markets are very liquidly traded. Of course this is where we are now.
The main point of FRB is indeed maturity transformation. The past purpose of FRB, and especially since the advent of deposit insurance has mainly been to provide a nominally risk free medium of exchange.
However, since equity markets are now so liquid, the need to transform long duration lending into short term liabilities is diminished, and this will I think be part of the future evolution of financial markets assuming we all refrain from pushing the Big Red Button. So, more equity holdings (especially, more employee compensation via equity), less long term lending and more continual rolling over of short term debt. All backed up by the printing press.
The winners of this game are those that can threaten the use of the printing press but organised things such that the threat very rarely is ever carried through.
A very insightful comment by a commentator on a Naked Capitalism post:
http://www.nakedcapitalism.com/2011/03/richard-koo-how-the-west-is-repeating-japans-mistakes.html#comment-346645
The fact is that fractional reserve lending is the only responsible way to foster natural economic expansion,
This is horribly wrong. Fractional reserve lending requires economic expansion — it’s a ponzi scheme. “Growth” has been turned into the idol it is to support the fractional reserve system. The system has priority, “growth” is just a side effect, is necessary to sustain the system, at any and all costs. And what on earth is “natural economic expansion”? And where is the responsibility? The Money Masters are bailed out at the cost of the poor to sustain forced and perpetual economic “growth” to sustain the system. In what way is that responsible?
A more fundamental question for you, Tao: Why is economic expansion good?
Below is a comment I have made as a response to a blogpost on Naked Capitalism:
http://www.nakedcapitalism.com/2011/03/this-is-how-qe-really-works.html#comment-348472
Skippy said:
“Skippy…the universe is the final abrogator and its talking quite loudly methinks…will we hear its call.”
I disagree. The creator of the universe is the final abrogator.
Mansoor
Below is a comment I have made as a response to a blogpost on Naked Capitalism:
http://www.nakedcapitalism.com/2011/03/this-is-how-qe-really-works.html#comment-348487
skippy says:
March 12, 2011 at 6:03 am
Mysticism has been with us a long time, yet, has failed so miserably (always too many unbelievers..cough GFC). Methinks clinging to mommy and daddy does not make us strong…humanity must grow up…lest we become an emperor still attached to a wet nurses mental teat.
Skippy…financial theory will not safe guard us from the universes machinations. Go look at the fossil record…eh.
Reply
mansoor h. khan says:
March 12, 2011 at 6:11 am
Skippy said:
“Skippy…financial theory will not safe guard us from the universes machinations. Go look at the fossil record…eh.”
Maybe if the species in the fossil record had developed financial theory which is in accordance how the universe actually works then they would be blogging with us on internet too right now.
Mansoor
Below is a comment I have made as a response to a blogpost on Naked Capitalism:
http://www.nakedcapitalism.com/2011/03/this-is-how-qe-really-works.html#comment-348487
skippy says:
March 12, 2011 at 6:32 am
ROFLOL…the absurdity of such a broad sweeping statement which repudiates every hard gleaned bit of empirical evidence to date..is well…Victorian at best.
Skippy…will it be mummy’s on the dining table, ensuring entertaining after meal conversation?
Mansoor H. Khan says:
March 12, 2011 at 7:05 am
Skippy said:
“ROFLOL…the absurdity of such a broad sweeping statement which repudiates every hard gleaned bit of empirical evidence to date..is well…Victorian at best.”
So the knowledge and creativity which produced the internet is not part of the empirical evidence what of humans are capable of?
Mansoor
Reply
skippy says:
March 12, 2011 at 7:14 am
“So the knowledge and creativity which produced the internet is not part of the empirical evidence what of humans are capable of?”
—-
as compared to the *double helix* ….NO
Reply
Mansoor H. Khan says:
March 12, 2011 at 7:26 am
Skippy said:
“as compared to the *double helix* ….NO”
It was also knowledge and creativity which produced the double helix.
Mansoor
Below are some more comments I have made or like on other blogs:
http://www.nakedcapitalism.com/2011/03/this-is-how-qe-really-works.html#comment-348401
Toby says:
March 12, 2011 at 4:26 am
No, the fact that an expression like “idle resources” can have any meaning at all is at the heart of the problem. As if resources existed just for humans to turn into ‘goods’ and only then have ‘value,’ otherwise they are ‘idle,’ and that this transformation should be done in ever increasing quantities, for ever, without caring about recycling and waste. As if that could possibly be a good system!
MMT does not address this issue explicitly or inherently, and hence cannot be the ’solution.’ It certainly removes some of the mystique around money, takes some of the nonsense of ‘inherent value’ out of the equation, which is good, but until we start addressing, deeply and explicitly, what costs really are, what true sustainability entails for humanity and our socioeconomics, that ‘earning a living’ is the wrong mode of thought, so to speak, and much else besides, we’re just rearranging deck chairs on the Titanic. We can only ‘enjoy’ such triviality for so long.
Reply
mansoor h. khan says:
March 12, 2011 at 4:53 am
Toby said:
“what true sustainability entails for humanity and our socioeconomics, that ‘earning a living’ is the wrong mode of thought, so to speak, and much else besides”
Agreed. MMT is not an answer to everything but it is a good place to start to clear-up our heads about how money really works.
Nature abhors imbalance and injustice.
For example, imbalance of electrical charges in the clouds vs. the earth’s surface will lead to lightning and thunder. Too much imbalance in social relations (too many people starving while many living in luxury in the same community) usually leads to violence and war. Taking of too many wrong risks causes a financial system to collapse, etc.
Therefore our job is to discover these laws of balance in nature (physics and chemistry) and in humans (economics, psychology) and use them to try to achieve our goal of maximum peace, fulfillment, fun and material comforts based on what these laws tell us.
Mansoor
Below are some more comments I have made as a response to various blogposts:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=138995&view=findpost&p=2901639
The fact people NEED to save does not alter the ability of civilization to absorb savings in the real world. if there is more saving required than the world can absorb then that implies the structure of civilization would have to change to reduce the level of required saving to something that can be absorbed.
If the world cannot absorb the level of required saving to create viable pensions then that says that a civilization relying on lifetime individual saving for old age care is not viable.
comment by Scepticus
Below is comment I have made on Emily's Blog:
http://emilyrichardsonsblog.blogspot.com/2010/03/siddhartha-db2.html?showComment=1300045329567#c4316599126604247024
(comment relates to a novel by Herman Hesse titled Siddhartha)
Emily Said:
"However, the conclusion of the novel was beautiful to me. When he described the river as “the flow of events and the music of life,” I could relate to that a thousand times over (126)."
I did not think that the conclusion of the novel was that great. The part I loved was in the beginning of the novel when Siddhartha decides to leave his teacher and guide (I forget his name). When he informs his teacher that he will be leaving the teacher gets upset. Siddhartha then hypnotizes him to show that he (meaning Siddhartha) has exceeded him and must seek another teacher and guide!
If we are not at peace we should keep searching until we find the truth.
(comment relates to a novel by Herman Hesse titled Siddhartha)
Mansoor H. Khan
Perhaps one of the greatest scenes ever in film.
http://www.myspace.com/video/perunapete/moses-parting-the-red-sea/31824277
Surah 26: Al-Shu'ara' (The Poets) in versus 60-67
"Strike the sea with thy rod." So it divided, and each separate part become like the huge, firm mass of a mountain.
“Strike the sea with your staff.” The sea then parted and became like a huge, firm mass of a mountain.
What this act of Moses and the response of God teaches us that all our doings like:
1. Starting a business with hope of business success.
2. Getting an education with hope of landing a good job upon graduation.
3. Planting seeds in hope of reaping a good harvest.
4. Performing scientific inquiry and research in hope of discovering how the universe really works and what natural laws of balance are in operation so we can come up with better rules, laws, procedures, practices, teachings, designs and theories to better manage our affairs (in realm of science, business, economics, psychology, medicine, ecology, etc.)
Are nothing more than:
“Striking the sea with our staff.”
Which will then (god willing) lead to success and a good result by his will, knowledge, works, planning and doing!
Mansoor H. Khan
Below are some more comments I have made to a blogpost on Native Capitalism:
http://www.nakedcapitalism.com/2011/02/haldane-unto-the-breach.html#comment-332047
F. Beard says:
February 21, 2011 at 5:07 pm
The bankers have a de facto government enforced monopoly on money creation via legal tender laws, a lender of last resort (the central bank), government deposit insurance, etc.
How about we abolish that monopoly so as to allow other ideas on private money creation to compete?
How long shall an incompetent money and banking system be privileged by government?
Reply
BFWR says:
February 21, 2011 at 5:55 pm
Decentralization of the the current financial paradigm would do little in the way of reform or democratization of the economy. The anarchy of multiple currencies would simply result in increased fraud, theft and recentralization of the financial system in short order. It is what the Banks would allow as a fall back to any real assault on their money creation privilege. What we actually need is the direct distributive financial paradigm which will drive the stale through the heart of oligarchic control of our money forever. G. K. Chesterton, Hillaire Belloc and C. H. Douglas are the direction we must go or we will end up having a reactionary socialist revolution and even more tyranny than we have now.
Reply
Mansoor H. Khan says:
February 21, 2011 at 8:08 pm
Exactly,
Decentralization will lead back here to our current situation eventually!
What is needed some simple, practical adjustments/refinements to our economic system:
We need to put income in the hands of consumers to combat global wage arbitrage. Global wage arbitrage tends to be deflationary. The federal government simply needs to print newly created money and:
a) create a massive jobs program
b) greatly increase aid to states and municipalities
c) greatly increase jobless benefits (amount of benefit and length of time) and extend COBRA benefits to 5 years
d) issue a $500 per month per citizen national dividend
And only if the above policies cause inflation, tax the rich.
Mansoor
Reply
Paul Tioxon says:
February 22, 2011 at 1:09 am
I never see the political dimension in any of these equations, but you seem to proposing one masquerading as a rational option for putting liquidity back into the economy without debt creation. I think there is the beginning of a theoretical framework for a cybernetic theory of money and the three day work week. Productivity gains and continued automation require less than forty hours a week necessary to be given to the wage economy. People really do not have that much productive work to do anymore and the inputs for agriculture and manufacturing and distribution require less than what is demanded of us in terms of time and real effort. The other four days can be relegated to whatever, mostly family obligations for many of us. This is the political meaning of under utilization. We just are not needed most of the time to get all of the work that needs to be done. This is a tremendous political problem that is coming to the fore with the accelerated automation brought on by IT and the internet. The fact that so many people do not work, and yet there is not mass starvation and homelessness is indicative of the wealth of America and the diminishing need for people to give 5 days a week and 8 hours a day to the corporate world. It has been barely 100 years that workers won the right to the 8 hour day and the week end in America. We are even more productive than then, so why are we forced to show up when not really needed? Apparently, there is less and less desire to keep so many people on the pay roll. Aside from capitalism needing more profits, that is their problem. Mine is why are we still working so hard when machines and computers are doing most of the work?
Continued on the next comment.
Continued from the previous comment:
Reply
Mansoor H. Khan says:
February 22, 2011 at 4:41 am
What I am trying to do is slowly “turn” our economic system to a new way to thinking about money and work. Americans are very suspicious of new “grand economic theories”. But Americans will easily adopt small incremental steps to the world you are alluding to.
Mansoor
Reply
BFWR says:
February 23, 2011 at 12:43 am
Yes, people have a hard time understanding new ways of doing things. But crises are a time when new and more radical ideas can take hold. We can linger in this crisis for many years if we are apathetic, and then have a very reactionary turn toward a rigid socialism. I would prefer that we get real about monetary reform before that happens so we can maintain a profit making system, but at the same time democratize the economy much more than it ever has been. We need a person who communicates well enough to break the images most people have in their heads about finance/money. An iconoclast.
Mansoor
Below is a comment I have made as a response to a blogpost:
http://www.bu.edu/today/world/2010/11/22/are-americans-god-s-chosen-people#comment-169731
I very much would like and pray that America become the beacon of truth, hope, knowledge, justice and all that is good and right.
Americans talk about liberty and pursuit of happiness as their highest goal. That is good and fine. But true happiness and peace comes from choosing to submit to the will of our creator.
Also, American idea of liberty is:
You leave me alone and I will leave you alone. This is no longer the best approach to managing our place in the world.
The world is becoming a much smaller place due to:
1. globalized trade
2. globalized pollution
3. globalized terrorism
4. World wars
America was rightly pulled into prosecuting and adjudicating world wars and global conflicts. America should want to become more god serving. If America wants that and prays for it it will (god willing) be chosen as the leader to practice the truth and disseminate the truth.
Mansoor
Below is a comment I have made as a response to a blogpost:
sgt_doom says:
February 7, 2011 at 3:26 pm
Mansoor said:
“The rich already pay the lion’s share of income taxes!”
Show me the data, Mansoor, show me the data.
Talk is cheap, buddy, and I know otherwise.
Mansoor H. Khan says:
February 7, 2011 at 8:32 pm
Here:
http://www.ntu.org/tax-basics/who-pays-income-taxes.html
Mansoor
Below is a comment I have made as a response to a blogpost on Naked Capitalism:
http://www.nakedcapitalism.com/2011/02/guest-post-leverage-inequality-and-crises.html#comment-319604
greg says:
February 8, 2011 at 1:12 am
Mansoor says Greg says:“Which, now that I’ve gone on about the banking system, is that the rich, and in particular the banksters, control the government, and will never allow this, or any other reasonable solution, to happen, even out of self-preservation.”
Mansoor: Said”
This is a bold statement. They will NEVER allow change even out of self-preservation. Stranger things have happened in human history. “
I will be surprised. I just don’t think the rich have the horizon or scope of vision required to manage our society, yet they have effectively taken control away from the people.
As for the Top 1% paying more than their fair share of taxes:
The top 1% earn 24% of the personal income of the nation, which works out to about $2.4 Trillion.
We have that the top 1% pay over 40% of all income taxes. All income taxes are $1.06 Trillion. So the top 1% pays $410 Billion or so, or just over 1/6th of their income, or 17%.
http://anamecon.blogspot.com/2010/10/what-income-of-top-1-means-to-rest-of.html
Mansoor H. Khan says:
February 8, 2011 at 1:47 am
Greg:
You are much too focused on what they earn. What they earn after taxes is only half the story. Again, if the rich put most of their money in the banking system and don’t spend it then the government can simply print and spend without creating inflation (no taxation needed!). We should encourage the highly productive to do their thing (produce stupendous amounts of goods and services) but not spend most of it. The bank balance of the rich is then at that point just a “score” which contributes much, much to society.
You said:
“I will be surprised. I just don’t think the rich have the horizon or scope of vision required to manage our society, yet they have effectively taken control away from the people.”
I pray that you are surprised! You are under-estimating the creative powers of the human mind. The only limit is which our creator puts on it. The default nature of the universe is abundance (not scarcity!). Just look through any telescope.
Inshallah, America will successfully meet this challenge too. God Bless America.
Mansoor
Below is a comment I made on a Mike Shedlock's blog post:
http://globaleconomicanalysis.blogspot.com/#jsid-1300100398-303
BenFranklinWasRight,
Here is another way to approach teaching readers what is going on:
Our world economy essentially converts raw materials to finished goods and services by using labor, knowledge and energy as inputs. As we advance in our engineering and management knowledge we can produce more and more with less and less. We don't NEED to have most people to have a job which can be justified on a net present value (NPV) basis (monetary profit basis). In fact, with the current method of distribution of purchasing/consumption rights (i.e., monetary compensation to workers and even public assistance given out) all the available productive capacity (worldwide factory capacity and willing, able, educated idle labor) is not getting utilized.
The way our monetary system (the global monetary system) is designed it NEEDS growth to exist or else it will collapse in a deflationary vortex. Do we have to have a monetary system which needs growth to exist? Of course not. But bankers don't know any other way to keep the power to issue currency to themselves but within current monetary paradigm. In the worst case we will have another world war two like event to destroy productive capacity and rebuild (i.e., this is a way to create growth). So this is the main problem. The readers of this blog should look around and also think about world history since the industrial revolution began and they will see that all evidence around them confirms this conclusion.
Mansoor
One of my all time favorite movies is:
The hunt for red October.
http://www.imdb.com/media/rm823365120/tt0099810
My favorite scene in the movie is when when the other Russian submarine launches a torpedo toward Sean Connery's submarine Sean instructs his officer to go and drive the submarine full speed ahead toward the oncoming torpedo (of course his officers are puzzled at this command).
When Sean Connery's sub hits the oncoming torpedo the torpedo crumbles and does NOT detonate because the torpedo has a built in safety range within which it will not detonate. This is engineered into the torpedo design to protect the launching sub from being hit.
Moral of the story: It requires knowledge of how the universe works in order to have a CHANCE at dealing successfully with such torpedoes like our current financial system.
Our current financial system is a fast approaching torpedo which most likely will lead to a Irving Fisher style debt deflationary collapse and/or chaos and/or global war.
The universe is not random it works according to consciously willed laws and rules.
Mansoor
Below is a comment I made on a Naked Capitalism post:
http://www.nakedcapitalism.com/2011/03/guest-post-democratic-finance-v-banking-fraud-in-early-america.html#comment-344749
mansoor h. khan says:
March 8, 2011 at 5:49 am
The only way the monetary paradigm will change is when the public learns more about how money really works. How it is created? And even more important how it is destroyed?
And how does it relate to inflation and the goods and services production process.
http://aquinums-razor.blogspot.com/2010/11/modern-monetary-theory-there-is-another.html
http://aquinums-razor.blogspot.com/2010/11/modern-monetary-theory-inflation-and.html
Mansoor
Reply
Paul Repstock says:
March 8, 2011 at 4:46 pm
Yes Mansoor. Money, the biggest of all mysteries/taboos.
Mentioned only indirectly in educational curricula, and then hanled more discretly than sex.
Money, you either have it or you don’t, end of discussion!
Below is a comment I made on a Naked Capitalism post:
http://www.nakedcapitalism.com/2011/03/guest-post-democratic-finance-v-banking-fraud-in-early-america.html#comment-349668
Mansoor H. Khan says:
March 15, 2011 at 12:56 am
TC,
“Thus does our current financial crisis stand as a moment at which the American System of Political Economy might at last prevail upon a globe existing far below its ultimate potential under the presently dominating neo-liberal, imperialist, monetarist architecture whose underpinnings relegate it, in fact, hopelessly insolvent.”
I could not agree more!
But as I said in an earlier comment on this post this will only occur when the public “grows up” about how money really works. True freedom comes from understanding the truth and accepting it and comes no other way. Everyday, I pray and hope that America (again) becomes beacon knowledge, truth, justice and balance. God Willing it will happen in my lifetime.
Mansoor
Below is a comment I made in a blog thread at Housing Price Crash:
http://www.housepricecrash.co.uk/forum/index.php?showtopic=159571&view=findpost&p=2901931
Sure, you haven't outlined a method for finding truth tho.
Injin,
The method is "your heart" It knows through experience! Don't completely rely on Plato. That is what you are doing.
That is why you hate force and violence against anyone. So do I. So do most people by far!
That is why you like marriage.
That is why you used the word "evil" earlier.
That is why you use the word "bulshit" earlier.
With me so far?
Mansoor
Below is a comment I made on a Mike Shedlock's blog post:
http://globaleconomicanalysis.blogspot.com/#jsid-1300239741-51
BenFranklinWasRight,
Here is another way to think about this social credit stuff which help here:
Think of our world economy as a giant machine which converts raw materials to finished goods and services by using labor (entrepreneurs, managers, workers) and knowledge (engineering and management knowledge)and energy and raw materials as inputs. Consumer spending (our money vote) causes this giant machine to detect demand and convert raw materials to finished goods and services.
But the problem is as we advance in our engineering and management knowledge we can produce more and more with less and less.
The global wage arbitrage and the ever increasing labor productivity depress average wages and further reduce aggregate demand. On top of that boom and bust cycles (caused by variation in investment spending) scare consumers (at least during bust periods) further crimping demand. So what we have is:
1. Depression of wages due to global wage arbitrage
2. During "busts" consumer demand is depressed even more than "normal" due to increased unemployment due to reduced investment spending
3. "Technology Unemployment" is happening as many workers are not needed for the current level of demand
So what is the solution?
social credit.
Why?
We don't NEED to have everybody to have a job which can be justified on a net present value (NPV) basis (monetary profit basis). In fact, with the current method of distribution of purchasing/consumption rights (i.e., monetary compensation to workers and even public assistance given out) all the available productive capacity (worldwide factory capacity and willing, able, educated idle labor) is not getting utilized.
Money can printed and handed out to people. By spending this handed-out money the public is simply activating this global productive machinery.
Of course If inflation results we would have to cut back on social credit or raise taxes. But equality of government revenue to government spending should not be the goal. The goal should to use-up all available global production capacity to help people.
Mansoor.
On March 17, 2011 I sent the following email message to my friend Patrick:
Patrick,
In order to try to build a mental image of how I see the economy below is another attempt to help you see what I see:
Think of our world economy as a giant machine which transforms and converts raw materials to finished goods and services by using labor (entrepreneurs, managers, workers) and knowledge (engineering and management knowledge) and energy and raw materials as inputs. Consumer spending (consumer demand expressed through our money vote) causes this giant machine to detect demand and convert raw materials to finished goods and services.
But the problem is as we advance in our engineering and management knowledge we can produce more and more with less and less.
The global wage arbitrage and the ever increasing labor productivity depress average wages and further reduce aggregate demand. On top of that boom and bust cycles (caused by variation in investment spending) scare consumers (at least during bust periods) further crimping demand. So what we have is:
1. Depression of wages due to global wage arbitrage
2. During "busts" consumer demand is depressed even more than "normal" due to increased unemployment due to reduced investment spending (as is the case right now)
3. "Technology Unemployment" is happening as many workers are not needed for the current level of demand
We don't NEED to have everybody to have a job which can be justified on a net present value (NPV) basis (monetary profit basis). In fact, with the current method of distribution of purchasing/consumption rights (i.e., monetary compensation to workers and even public assistance given out) all the available productive capacity (worldwide factory capacity and willing, able, educated idle labor) is not getting utilized.
We can easily use this excess production capacity by simply printing money and handing it out (economist C. H. Douglas called named this idea social credit in 1929) to people. By spending this handed-out money the public is simply activating this global productive machinery.
Of course If inflation results we would have to cut back on social credit or kill purchasing power by levying taxes. But equality of government revenue to government spending should not be the goal. The goal should be to use-up all available global production capacity to help people and improve the human condition.
Mansoor H. Khan
Below is a comment I made on a Naked Capitalism post:
http://www.nakedcapitalism.com/2011/02/guest-post-leverage-inequality-and-crises.html#comment-318207
Skippy says:
February 6, 2011 at 9:12 am
The age old question, how to defeat a loose knit pack of sociopaths, which seemingly rise organically with-in all man made systems…with out becoming one your self or treating others as they would.
Skippy…the I want[s / need vs. the why would methinks before my self. Too turn unencumbered giving into self hate is their greatest desire, it is the light they can not bare, so give often and freely…it is their anathema.
Mansoor Khan says:
February 6, 2011 at 11:24 am
All false gods (like money) always destroy themselves. Because they cannot keep up with what they themselves have created. Extreme love of money will also be destroyed by none other than people themselves. I just pray and hope that the process is not too painful.
Mansoor
Below is a comment I made on a Naked Capitalism post:
http://www.nakedcapitalism.com/2011/03/japan-earthquake-shows-business-reengineering-relies-on-bogus-thinking-similar-to-financial-engineering.html#comment-352190
sgt_doom says:
March 16, 2011 at 1:40 pm
When the only thing corporations and banksters can do (most especially in Amerika) are either generating (1) junk paper, (2) doing private equity leveraged buyouts pump-and-dumps, and (3) offshoring jobs, and importing foreign scab workers (who then make for further homeless, and the occasional NY Times Square attempted car bomber), what more can one expect?
Reply
Thomas Aquinas says:
March 18, 2011 at 11:20 am
Many, many Americans do not feel that globalization has helped them in the long run. Their lives are NOT more prosperous, secure and satisfying than before the warp speed globalization of the last 25 years.
This is because justice and fairness should be a goal that is just as important as efficiency. Our leaders have lost sight of properly balancing these two.
Reply
Below is a comment I made on my earlier blogpost:
http://aquinums-razor.blogspot.com/2009/07/welcome-market-oracle-and-seeking-alpha.html?showComment=1247128223108#c7327126868094907444
The Arthurian said...
Aquinum,
I would like to read about the origin and significance of the name of your blog. I've heard of "Occam's razor" of course....
July 9, 2009 4:30 AM
Aquinum said...
To Arthurian,
The origin is based on name Thomas Aquinas. From Wikipedia below:
Saint Thomas Aquinas, O.P. (also Thomas of Aquin or Aquino; born ca. 1225; died 7 March 1274) was a priest of the Roman Catholic Church in the Dominican Order from Italy, and an immensely influential philosopher and theologian in the tradition of scholasticism.
One of things he is known for is to declare that:
There is No conflict between faith and reason.
July 9, 2009 5:40 AM
Aquinum said...
Aquinum is the ancient Italian city where Thomas Aquinas was born.
More at:
http://www.youtube.com/watch?v=gX1_1bed3Dc
Below is a comment I made on a Mike Shedlock's blog post:
http://globaleconomicanalysis.blogspot.com/2011/03/cato-institute-discusses-origin-of.html
BenFranklinWasRight,
You need to give a mental image of the world economy and how it relates to money before "social credit" ideas will make sense. The mental image should be something like this:
Image the world economy as a huge productive machine which creates goods and services with the following as inputs to the productive process:
1. Raw Materials
2. Labor (entrepreneurs, managers, workers)
3. Energy (I have separated energy from other raw materials because it tends to be the contraining raw material for the
overall world economy)
4. Time (Time is needed to transform raw materials into finished goods and services).
5. Money (yes, money is an input to the production process, money when spent tells entrepreneurs and managers through prices
observed in the marketplace what to make and how much to make)
Think of money (when spent or when attempting to be spent) as vote (a money vote) which tells this giant global machinery what to make and how much of it to make.
If spending is too much too fast the global productive machinary will not be able to keep up and the result will be inflation.
If spending is too little the markets will bid prices down and you will deflation and idle global production capacity.
"social credit" among other things will be able to use-up the idle global production capacity and stop deflation.
Printing money to use-up idle production capacity is NOT re-distribution it is just a distribution of idle capacity.
Mansoor Khan
Below are some more comments I have made as a response to various blogposts by Scepticus (screen name)on his "Liminal Hack" blog:
http://liminalhack.wordpress.com/
http://liminalhack.wordpress.com/2011/04/12/rip-inflation-targeting-19-2011/#comment-351
Scepticus,
There is so much we disagree on!
1. For you:
a. Money should be backed by debt (that is: labor of the borrower).
b. The central banks should charge negative interest rates in order to balance supply (i.e., production capacity) and demand (i.e., avert too much deflation).
c. inflation cannot be controlled
2. For Me
a. Debt money does not work anyway due to the need for government backed deposit insurance and constant bailouts of banks
b. Negative interest rates would be way too confusing for the populace. They would require limiting cash withdrawals or expiring paper money holdings or something like that.
c. My conclusion is that based on how banks really behave debt money is really just base money in disguise.
d. Base money is backed by the labor of the all citizens of the state.
e. Given points c and d above we might as well teach the populace the truth about money (and banking) and just use base money with no government backed insurance or bailouts for any “money fractionalizer” who gets into trouble.
f. In the current system, in my opinion, all these “money factionalizers” are getting a free gift from the rest of us.
Mansoor
Think of the world economy as a giant machine with these inputs:
a) entrepreneurs and other workers
b) raw materials
c) energy (i separate energy from other raw materials for a reason)
d) knowledge
e) time
f) demand (as expressed by actual consumer spending or anticipated consumer spending).
Entrepreneurs combine management knowledge with engineering knowledge using labor, raw materials and energy and over time produce goods and services based on demand.
If global consumers, businesses or governments try to "push" this machine too fast by spending too much too fast the result will be inflation (this is an attempt to run the "global economic machine" faster than its capacity).
If consumers, businesses or the government don't spend enough then this machine will slow down and there will be deflation and the economy will probably run below capacity (i.e., idle "good" labor and idle factory capacity will result).
Note that this machine does NOT care how much money exists in people's, or business's or government's bank accounts or how much they owe or how much is the national debt or how much is unfunded liabilities or how much surplus money anyone has or how much debt anyone has. The ability to produce loaves of bread does not rest on any of these things.
Capacity to Produce goods and services is what matters. Try to spend more money than the capacity of the economy and you get inflation. Inflation is the issue and not debt.
Even if all the governments in the world had budget surpluses we could still get inflation because if production capacity is hampered (say a nuclear war happens) then we will still have inflation due to reduced production capacity and transport. I am using this outlandish example to get your mind away from accounting entries (budget surplus or deficit or credit creation or government money printing) and get your mind to focus on the physical process of production of goods and services.
Once your mind grasps this model then tell me how to handle debt or budget deficit, etc.
On June 23, 2011 I sent the following email message to my friend Patrick:
Patrick,
Instead of declaring any economic --ism wrong you should first try to clarify in your mind the relationship between the production process (for example as in the production of "loaves of bread") and currency.
Most people are very, very confused about this relationship. Even though it is not that hard to understand. Just imagine in your mind entrepreneurs, factories and labor turning raw materials into finished goods (e.g., production of "loaves of bread"). How does currency relate to this picture. I would suggest to you that there are three primary relationships the production process has to currency.
They are:
1. By spending currency consumers generate demand. Demand is basically information (signals) which tells entrepreneurs what to produce and how much to produce (spending generates demand).
2. Currency allows efficient trading of raw materials, labor and finished goods and services between businesses and between businesses and consumers (this is trading).
3. Entrepreneurs and labor can and do work and produce real goods and services just for acquiring currency itself with the expectation of purchasing real goods and services later (this is savings).
Item number one above (generation of demand) and two above (efficient trading) are not hard to understand. The last statement (savings) is where the confusion lies. Let us go back to the image of entrepreneurs, factories and labor turning raw materials into finished goods. Now with this image of production in mind what is savings?
Savings is that portion of production (excess "loaves of bread" produced) which is not consumed or traded for other real goods and services immediately. Notice, when it comes to savings the acquirer of currency (the saver) does not care whether it is freshly printed by the government or whether someone who previously saved it is giving it to them in exchange for real goods and services.
In a situation where there was excess production and demand was not sufficient to absorb that excess then prices would go down thus sending a signal to the entrepreneurs to produce less. Now you might ask so what is wrong with that?
On June 23, 2011 I sent the following email message to my friend Patrick (comment continued from previous comment):
You are correct there is nothing really wrong with that. The question you have to ask "can you improve the human condition in this situation?" by using up the extra production capacity due to slack demand. My conclusion is that yes the government can help in two ways:
If the government printed fresh currency and spent it when there was slack demand then it would be helping is at least two ways stated below:
a. First it is helping the entrepreneurs and workers who would like to "save". If the extra demand (via spending of freshly printed currency by the government) did not occur the entrepreneurs and workers would not be able to save as much.
b. The government can do "social" good by this extra spending. We can argue about what the priorities should be but the main point is that there is plenty it can do (infrastructure, education, healthcare for those who can't afford it, social safety nets of all kinds, encourage research in fields of science and engineering which may help us with national defense or curing diseases, etc).
Nothing is free. The "extra" government spending is "more fully using" civilizational capital and earth's raw materials. Physical capital (like factories and infrastructure) and knowledge capital (management and engineering knowledge) which has accumulated for thousands of years (yes we are truly blessed, more than we will ever know) is being utilized more fully to "improve the human condition".
Of course, if there is no slack production capacity in the economy then government should cut back spending but blank statements and ideas that say "Deficit spending is a bad thing" are wrong. Just think about the mental picture I have described above before considering various economic theories and arguments.
Mansoor H. Khan
P.S. I did not even go into the fact that in a debt based currency system debtors would be truly screwed if prices went down.
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog (http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-440672):
mansoor h. khan says:
August 7, 2011 at 8:44 am
snthaoeu309h90,
Let me clarify. Even with all this massive fraud and waste and malinvestments (banker or otherwise). We have tremendous unused production capacity worldwide right now.
Right now we need a massive jobs program and greatly expanded public assistance/unemployment insurance compensations/social security payouts to deal with the immediate social chaos. Then we can work on how to re-organize our financial system and possibly punish abusers without crashing the system that produces (still) so much stuff and has so much unused production capacity.
Mansoor
and
mansoor h. khan says:
August 7, 2011 at 9:57 am
Cheer-up a little bit and have hope. We probably have not yet reached “peak” creativity. We need to focus our creative energies on these issues.
Mansoor
and more:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-440761
mansoor h. khan says:
August 7, 2011 at 11:47 am
Susan,
The biggest peak issue at hand is most likely “peak oil” and “Return On Energy Invested”. If so we need a JFK style “alternative energy fundamental research program” equivalent of the “space program” (just as massive) in order to direct our creative energies to find the right alternative energy source with an acceptable “Return On Energy Invested” in it.
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog
(http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-440819
)
mansoor h. khan says:
August 7, 2011 at 1:21 pm
Maju,
You do not need to tax the rich. You need to inspire them to not spend most of what they create. They can leave their money in the banking system (yes a full reserve state owned and operated banking system). Their bank accounts will act as “score keeping” which will motivate them and others to create more.
And the state can then spend for social good without creating inflation.
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog
(http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-440819
)
mansoor h. khan says:
August 7, 2011 at 1:21 pm
Maju,
You do not need to tax the rich. You need to inspire them to not spend most of what they create. They can leave their money in the banking system (yes a full reserve state owned and operated banking system). Their bank accounts will act as “score keeping” which will motivate them and others to create more.
And the state can then spend for social good without creating inflation.
Mansoor
Below are some more comments I have made as a response to various blogposts by Mike Shedlock.
http://globaleconomicanalysis.blogspot.com/2011/08/euro-area-central-banks-to-hold-crisis.html?x#echocomments
BWFR,
But your ideas sound too good be "truel". It seems to people that you are trying to get something for "nothing" (do no work and get "social credit" money anyway).
First, you need to clarify in the minds people the relationship between:
1) demand
2) raw materials
3) the production process (turning raw materials into finished goods using knowledge and labor and raw materials as inputs)
4) money
Once the relationship of the production process to money (finance as you say) is fully understood by the populace your ideas will come home and the people will realize how incredibly blessed humanity is. Our accumulated knowledge is what makes the production process so efficient (very small number of labor hours are required to make "basics" for all).
Mansoor H. Khan
and
BWFR,
But cultural conditioning is based on the mental model (mental pictures) of those practicing the cultural values. In order to have people break out of it you need to modify the mental model. And of course you want to create a mental model that is closer to reality. That is why you need to discusss how the production process relates to money (finance) over and over again (this is where the main confusion is). This is basis of your new financial paradigm. You want to have people see that your new "mental model is closer to reality". And reality for most people is the physical world (raw materials, jobs, money, finished goods, roads, cars, healthcare, etc.)
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-442332
mansoor h. khan says:
August 10, 2011 at 5:25 am
Skippy says:
“Economists keep avoiding physics, why, this world is a dynamic system which has taken eons to stabilize, allow life.”
That is because physics (i.e., science) has provided tremendous amount of new knowledge in the past 100 years which has caused human productivity to skyrocket. Most people (including myself)expect this trend to continue (god willing).
Therefore:
Finite resources X Knowledge X Management Skill = Effective Utility of those finite resources
Mansoor
More:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-442324
Deus-DJ,
We don’t need to worry about Minsky instability in a full reserve banking system (i.e.,no leverage) model. Only thing we need to worry about is deflation and inflation. Which can be dealt via fiscal stimuluses / taxation / reduction of gov spending.
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-442332
mansoor h. khan says:
August 10, 2011 at 5:25 am
Skippy says:
“Economists keep avoiding physics, why, this world is a dynamic system which has taken eons to stabilize, allow life.”
That is because physics (i.e., science) has provided tremendous amount of new knowledge in the past 100 years which has caused human productivity to skyrocket. Most people (including myself)expect this trend to continue (god willing).
Therefore:
Finite resources X Knowledge X Management Skill = Effective Utility of those finite resources
Mansoor
More:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-442324
Deus-DJ,
We don’t need to worry about Minsky instability in a full reserve banking system (i.e.,no leverage) model. Only thing we need to worry about is deflation and inflation. Which can be dealt via fiscal stimuluses / taxation / reduction of gov spending.
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-442466
mansoor h. khan says:
August 10, 2011 at 11:03 am
Ok. That is where we differ.
One vs. two. You believe (in a sense) that universe is “god”. Its laws are god (i.e., what is implied by the fossil record). I believe in two. Universe (the two) was created by the one god.
The one (god) is mercy (infinite mercy). Which is better than justice. If he was just justice we would get what we deserve. Mercy means we can get much much more than what we deserve.
All laws of the universe are enslaved to this one god and he can guide us to solve our problems.
May the creator guide us through this upheaval.
Mansoor
Reply
Maju says:
August 10, 2011 at 1:51 pm
It does not matter what you believe for outside this life. In this box, we have to abide by the rules of the box. Whatever comes after death, we will deal with then.
Reply
mansoor h. khan says:
August 10, 2011 at 2:00 pm
don’t be silly…
of course it matters. it guides human behavior right now in this box.
therefore, knowledge of what is in the next box CAN impact what happens in this box..
mansoor h. khan says:
August 11, 2011 at 4:07 am
skippy said,
“true leadership quality’s like sharing the pain, setting an example of self sacrifice without personal reward, working for the benefit of all involved, not looking down on those in your charge etc, etc…”
If an expectation of reward in heaven helps me to behave like you describe above (which you want people to do) why are you so ticked off with these beliefs so much?
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/dalia-marin-on-outsourcing-income-inequality-ceo-pay.html#comment-442948
mansoor h. khan says:
August 11, 2011 at 6:54 am
MaruKun,
It is an ancient saying that if you want to destroy a civilization then “corrupt the priests of that civilization” and rest will follow.
For all practical purposes economists serve as the “priests” of our modern civilization.
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-443400
mansoor h. khan says:
August 11, 2011 at 11:11 pm
Skippy,
You are so upset because you can conceive of heaven on earth if people lived by good values you mentioned above. Yet people don’t. specially those in power.
Keep searching. Keep thinking why would the creator (if he exists — in your case) would have set this place up this way? (Read Siddhartha by Herman Hesse).
Mansoor
skippy says:
August 11, 2011 at 11:59 pm
“You are so upset because you can conceive of heaven on earth if people lived by good values”
Projection is the ideologists main tool, it seeks to frame the equation in their favor.
Skippy…If your beliefs are so important, you should be challenging them at every opportunity, believing because you were born into it, because most around you do, in spite of others that do not, to get though the day (desires lament), the longevity of a belief, etc, etc are not in any way a substantiation of it. Historically from the devices used to beguile the uninformed, too heavy handed decree (observers conflict with beliefs opines), another picture emerges.
Go live with out every thing you know for 6 months, total isolation (no books, no hint of before, live off the land), then I would see whom you are, stripped of convenience.
mansoor h. khan says:
August 12, 2011 at 4:13 am
Skippy,
“Go live with out every thing you know for 6 months, total isolation (no books, no hint of before, live off the land), then I would see whom you are, stripped of convenience. ”
No. No. I would never do that. I am much too weak for anything like that and I don’t want a test too harsh. That is why I am so scared of a possible coming “collapse” but I have not lost hope (and I pray) that things can change enough so we don’t turn mad max and that is why I blog (do my part the best I can!).
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-443400
mansoor h. khan says:
August 11, 2011 at 11:11 pm
Skippy,
You are so upset because you can conceive of heaven on earth if people lived by good values you mentioned above. Yet people don’t. specially those in power.
Keep searching. Keep thinking why would the creator (if he exists — in your case) would have set this place up this way? (Read Siddhartha by Herman Hesse).
Mansoor
skippy says:
August 11, 2011 at 11:59 pm
“You are so upset because you can conceive of heaven on earth if people lived by good values”
Projection is the ideologists main tool, it seeks to frame the equation in their favor.
Skippy…If your beliefs are so important, you should be challenging them at every opportunity, believing because you were born into it, because most around you do, in spite of others that do not, to get though the day (desires lament), the longevity of a belief, etc, etc are not in any way a substantiation of it. Historically from the devices used to beguile the uninformed, too heavy handed decree (observers conflict with beliefs opines), another picture emerges.
Go live with out every thing you know for 6 months, total isolation (no books, no hint of before, live off the land), then I would see whom you are, stripped of convenience.
mansoor h. khan says:
August 12, 2011 at 4:13 am
Skippy,
“Go live with out every thing you know for 6 months, total isolation (no books, no hint of before, live off the land), then I would see whom you are, stripped of convenience. ”
No. No. I would never do that. I am much too weak for anything like that and I don’t want a test too harsh. That is why I am so scared of a possible coming “collapse” but I have not lost hope (and I pray) that things can change enough so we don’t turn mad max and that is why I blog (do my part the best I can!).
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/james-galbraith-on-fraud-and-how-bad-economic-thinking-got-us-in-this-mess.html#comment-443400
mansoor h. khan says:
August 11, 2011 at 11:11 pm
Skippy,
You are so upset because you can conceive of heaven on earth if people lived by good values you mentioned above. Yet people don’t. specially those in power.
Keep searching. Keep thinking why would the creator (if he exists — in your case) would have set this place up this way? (Read Siddhartha by Herman Hesse).
Mansoor
skippy says:
August 11, 2011 at 11:59 pm
“You are so upset because you can conceive of heaven on earth if people lived by good values”
Projection is the ideologists main tool, it seeks to frame the equation in their favor.
Skippy…If your beliefs are so important, you should be challenging them at every opportunity, believing because you were born into it, because most around you do, in spite of others that do not, to get though the day (desires lament), the longevity of a belief, etc, etc are not in any way a substantiation of it. Historically from the devices used to beguile the uninformed, too heavy handed decree (observers conflict with beliefs opines), another picture emerges.
Go live with out every thing you know for 6 months, total isolation (no books, no hint of before, live off the land), then I would see whom you are, stripped of convenience.
mansoor h. khan says:
August 12, 2011 at 4:13 am
Skippy,
“Go live with out every thing you know for 6 months, total isolation (no books, no hint of before, live off the land), then I would see whom you are, stripped of convenience. ”
No. No. I would never do that. I am much too weak for anything like that and I don’t want a test too harsh. That is why I am so scared of a possible coming “collapse” but I have not lost hope (and I pray) that things can change enough so we don’t turn mad max and that is why I blog (do my part the best I can!).
Mansoor
http://www.nakedcapitalism.com/2011/08/freedom-versus-markets.html#comment-444080
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
mansoor h. khan says:
August 13, 2011 at 3:02 am
Yves,
You are giving up on one dollar one vote far too easily.
We need to separate industrial capitalism (production) from financial capitalism (financing).
Market discipline has worked much, much better on the industrial side of the economy. Enron, Worldcom, the dot coms were toasted by the market and rightly so. one dollar, one vote worked just fine. The investors were also punished accordingly. And the clowns running these companies discredited as they should have been.
This did not happen for Wall Street and the banks in 2008. Because the invisible hand if allowed to do its handy work in this case would have toasted our civilization itself.
We need to make our payment clearing system (yes our currency system) a public good (with no private money creation) like the services our military are a public good.
If that had been the case (public money system). We could have let these clowns (the private banks) go the way of Enron and Worldcom with proper punishment for the investors (in these banks) as well being meted out. There could not have been a better lesson for all of society on how not to behave than seeing investment bankers become taxi drivers.
And any resulting deflation from the collapse of any mis-matching maturity private banks (AKA as the shadow banking system) could have been simply handled by government by printing money and spending it or just giving it to people to bring the economy back to balance (no deflation).
As hard as it is to believe we still have tons of production capacity worldwide even with all this fraud, waste, abuse and mal-investments done by the bankers (yeah, yeah I know peak oil means we may not be able to use all this production capacity but that is a different issue).
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/guest-post-austerity-and-runaway-inequality-lead-to-violence-and-instability.html#comment-444635
mansoor h. khan says:
August 14, 2011 at 10:48 am
Philip Pilkington,
“Money is simply the grease between the wheels and it can be created at will provided it facilitates production.”
That is what I think.
But why would our elites want to commit “civilizational suicide” by insisting that we stay on our current economic path? Am I missing something?
Mansoor
Reply
frobn says:
August 14, 2011 at 11:11 am
There is a strong belief among the populace that things can somehow get back to BAU, i.e. growth and consumption and a corresponding strong denial that we are at the beginning of constraint in fossil fuels and natural resources. The elites know this and are fortifying their whatever they can salvage.
Reply
mansoor h. khan says:
August 14, 2011 at 11:35 am
Frobn,
“The elites know this and are fortifying their whatever they can salvage.”
Alternatively, they can start the education process and re-structure the economy. Painful but probably doable.
Why commit “suicide”? At least try something?
Mansoor
Reply
Mel says:
August 14, 2011 at 12:28 pm
I watched some of Charlie Rose’s brain science series a while ago, and since then I’ve been trying to figure out what could link larger balance sheet numbers with dopamine uptake. I can only imagine alpha-dominance factors: “Me bigger”, “I take away his”, “They my bitches”.
It could indeed be that at the end of a long game of chasing local optima, the elites will live in frigid stone castles, eating gruel, and dying early of pneumonia, but they would still be barons, and have the satisfaction of seeing their serfs living in mud, eating even less gruel, and dying even younger. It might not be much, but it would be the best there was.
Reply
mansoor h. khan says:
August 14, 2011 at 12:55 pm
Mel,
“It could indeed be that at the end of a long game of chasing local optima, the elites will live in frigid stone castles, eating gruel, and dying early of pneumonia, but they would still be barons, and have the satisfaction of seeing their serfs living in mud, eating even less gruel, and dying even younger. It might not be much, but it would be the best there was.”
Does this mean that evil exists? And they are guided by the evil one?
Mansoor
Reply
Mel says:
August 14, 2011 at 1:09 pm
I think of danger and benefit, not good and evil.
To the extent that I’m right, what’s in play are the instinctive primate policies for picking a group leader. As chimps or baboons or humans generally do.
mansoor h. khan says:
August 14, 2011 at 1:20 pm
Mel,
“I think of danger and benefit, not good and evil.”
Would it not be more beneficial and less dangerous for them (the elites) and their children and grand children we did not descend into another “dark age”?
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/guest-post-austerity-and-runaway-inequality-lead-to-violence-and-instability.html#comment-444719
blunt says:
August 14, 2011 at 1:33 pm
“Does this mean that evil exists? And they are guided by the evil one?”
No, Mansoor Khan, it merely means that unbridled greed, baleful ignorance, unmitigated pride and inextinguishable envy exist within we humans. Those qualities exist in us right along with compassion, intelligence, love, and empathy.
In our last 400 years of western culture we have more and more chosen to privilege the former four over the latter four on my list. Thus, among the elites, those who have gleaned most from the current set of systems and values the west operates under have been best trained to embody the former rather than the latter.
They have found it useful to have the rest of us learn something about the latter, but the style in which they’ve ruled has precluded the circumstances that would lead to an abundance of the latter qualities among the impoverished, or simply, among all of those who struggle to make ends meet.
The result has been the current state of almost total materialistic value-norms for the cultures of the west and increasingly of the east as well. Since they have established what they do as, perforce, the good; they cannot even imagine that a different way or ways exist and could be found useful for managing a recovery and an end to crisis with much less pain and suffering than their way will require.
Is that evil? I don’t believe it’s the Satan-made-me-do-it evil as in evil as a enormously powerful metaphysical force. But, yes, in terms of this world and human life and the notion that cooperation and decreasing suffering rather than competition and increasing suffering is good, then their way is “evil.”
mansoor h. khan says:
August 14, 2011 at 2:01 pm
Blunt,
“then their way is “evil.” “.
Yes. But it is also intentional, willful, choosen, pre-meditated suicide.
Mansoor
blunt says:
August 14, 2011 at 3:17 pm
Mansoor Khan,
You seem a decent man, a good man, and I admire your sense that they imagine they will suicide with everyone dying of the lack of oxygen, the dearth of water, the desert where crops once flourished.
What you miss is the inability of the imagination in the dominants to readily see their evil as evil. My ancestor owned slaves and was a god-fearing man (so I finally heard.) Yet, what god did he fear and how did he avoid seeing the suffering and “evil” *smile* that he caused by the simple act of buying and selling?
It’s the fashion in which we seem to be wired. We miss what we find beneath our notice. We confound profit with “virtu;” and that which maximizes profit as “good” (no matter how many die for that good.)
Thus, there’s a place prepared for the KIngs of Hedge-Funding and the Magnificent CEOs and the scions of the past four century’s wealth hoarders that will allow them to survive the tragedy the rest of us will see. (Think: a Calvinistic sense that great wealth = great favor with the deity.) They will remain unscathed by ultraviolet radiation and inability to breathe the air. They think of themselves as The Chosen and, so, are beyond the rech of the catastrophe.
At some point cupidity = stupidity and most of that lot (see Koch Bros.) have reached the equivalence point and surpassed it. I absolutely believe that they literally CANNOT do other than what they do.
mansoor h. khan says:
August 14, 2011 at 3:35 pm
Blunt,
” (Think: a Calvinistic sense that great wealth = great favor with the deity.) ”
God willing the deity you mentioned above can help them to change their ways before it is too late.
Mansoor
Below are some more comments I have made as a response to a blogpost:
http://www.thecactusland.com/2009/11/what-qe3-will-look-like.html?showComment=1313399586006#c6757201614385170021
Robert,
Thanks for the reply.
There is even a simpler way to look at it. The allocation of the future new global reserve currency to individual countries will really be about oil output allocation. Since the most scarce resource with respect to demand defines what money is. With peak oil: Money = Oil and Oil = Money.
At least this keeps the countries from having a hot war over more and more scarce oil. So may there is blessing in disguise from god in all this.
Mansoor
Below are some more comments I have made as a response to a blogpost:
http://www.thecactusland.com/2009/11/what-qe3-will-look-like.html?showComment=1313399586006#c6757201614385170021
Robert,
Thanks for the reply.
There is even a simpler way to look at it. The allocation of the future new global reserve currency to individual countries will really be about oil output allocation. Since the most scarce resource with respect to demand defines what money is. With peak oil: Money = Oil and Oil = Money.
At least this keeps the countries from having a hot war over more and more scarce oil. So may there is blessing in disguise from god in all this.
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/guest-post-austerity-and-runaway-inequality-lead-to-violence-and-instability.html#comment-444927
mansoor h. khan says:
August 14, 2011 at 11:22 pm
Solo,
Have hope. civilizational collapse (what we will probably have in the next 2 to 5 to 10 years — don’t know the exact timeframe) often leads to (for those who are still left alive) a re-discovering of faith and god and value of cooperation and brotherhood.
Because men realize they are not in control and they need each other. It was one thousand years ago when the western civilization was strongly christian that Thomas Aquinas wrote that there is no conflict between “faith and reason”.
Of course he was trying to get Christians to be more interested in this (the material) world. Thus Christiondom was now set to delve in the world but then (eventually) forgot about faith.
I believe (after the collapse) there will be re-balancing and the faith part will re-appear (god willing).
Mansoor
Below are some more comments I have made as a response to various blogposts. This comment was made on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/08/guest-post-austerity-and-runaway-inequality-lead-to-violence-and-instability.html#comment-444927
mansoor h. khan says:
August 14, 2011 at 11:22 pm
Solo,
Have hope. civilizational collapse (what we will probably have in the next 2 to 5 to 10 years — don’t know the exact timeframe) often leads to (for those who are still left alive) a re-discovering of faith and god and value of cooperation and brotherhood.
Because men realize they are not in control and they need each other. It was one thousand years ago when the western civilization was strongly christian that Thomas Aquinas wrote that there is no conflict between “faith and reason”.
Of course he was trying to get Christians to be more interested in this (the material) world. Thus Christiondom was now set to delve in the world but then (eventually) forgot about faith.
I believe (after the collapse) there will be re-balancing and the faith part will re-appear (god willing).
Mansoor
Below are some more comments I have made as a response to various blogposts:
http://dailyreckoning.com/stocks-and-gold-point-to-a-hellish-outcome/
mansoor h. khan said
Bill,
Owning gold is protection against a “mad max” scenario. Owning “cash” or “Treasuries” is protection against deflation.
That is why it is so confusing.
If I had $10 million dollars as a rich person. It would be perfectly rational for me to put $5 million in owning “physical” gold (not paper gold) and $5 million in treasuries even if I expect deflation (that means even the gold price will go down).
The problem with deflation and ultimate hyper-deflation is that the “state” and the “banking system” may not survive if a “mad max scenario” ensues due to hyper-deflation.
The “mad max scenario” is total chaos or the hyper-deflation turns to hyperinflation (if the debtors win the game!) and a new currency is issued.
Mansoor
on August 20, 2011.
Read more: Stocks and Gold Point to a Hellish Outcome http://dailyreckoning.com/stocks-and-gold-point-to-a-hellish-outcome/#ixzz1VYlUoH7H
Below are some more comments I have made on seeking alpha:
http://seekingalpha.com/article/288478-why-qe3-wouldn-t-work-and-why-it-won-t-happen#comment-1848492
Why is printing money (via the FED) and "spending" it into the economy is a problem if unused capacity of the economy is being "used up" for social good?
In the end what really matters is productive capacity of the economy. Monetary system is an accounting and control system to manage the production system (i.e., the real economy).
Our monetary system is an accounting system in a sense it keeps track of (and limits) who is "allowed" to spend (i.e., "use-up") what portion of the available productive capacity. It is a control system because it can be used to "reign" in spending when spending outpaces production capacity (i.e., inflation ensues) via the FED's open market operations or we may even need to tax and "destroy" money in order to reign in inflation.
Yes. There is a lot of central planning involved in our "fiat" monetary system.
A factory does not care how much national debt exists or what our unfunded liabilities are or even how much private debt exists the factory is perfectly capable of producing "goods and services" no matter what all these accounting entries say.
Mansoor
Below are is comment I have on seeking alpha:
http://seekingalpha.com/article/287879-krugman-s-war-cry-won-t-avert-depression#comment-1848503
Charlie,
Your said:
"The only way out of this is growth."
If "peak oil" is true then we will not be able to "grow" out of the problems the economy is having. Keynesian economics implicitly assumes that "natural resources" are NOT a constraint to economic growth.
Therefore, if "peak oil" is true we will need new ideas about managing economic contraction (less economic activity) because the overall worldwide economic activity will be constricted by available energy supplies (for right now that is mostly fossil fuels).
Mansoor Khan
Below is a comment I made on the Naked Capitalism blogsite:
http://www.nakedcapitalism.com/2011/08/ecri-its-too-late-for-obama-on-jobs.html#comment-455867
F. Beard says:
August 30, 2011 at 5:59 pm
We do not need more monetary inflation, whatever the source. eric anderson
The entire population could be bailed out without increasing the size of the money supply. Here’s how:
1) Forbid any further “credit” creation pending fundamental reform. This would be massively deflationary by itself as existing credit was paid off with no new credit to replace it.
2) Send monthly and equal bailout checks to every adult citizen, including savers, equal in total to the amount of credit paid off the previous month. Continue till all private debt was paid off.
The above would fix everyone, including the banks in nominal terms without a serious risk of price inflation. It would also reduce relative wealth disparity since the bailout checks would do little for the rich but a great deal for the poor.
Reply
mansoor h. khan says:
August 31, 2011 at 6:47 am
F. Beard said:
“Continue till all private debt was paid off.”
No. Don’t need to stop the checks until inflation is observed!
Mansoor
Reply
F. Beard says:
August 31, 2011 at 6:54 am
Don’t need to stop the checks until inflation is observed! mansoor h. khan
I had not thought of that. Why not? The Bible commands from 20 to 700% restitution for theft.
mansoor h. khan says:
August 31, 2011 at 7:29 am
F. Beard,
“I had not thought of that. Why not? The Bible commands from 20 to 700% restitution for theft.”
F. Beard. Its even more than that. We (humans) are blessed much more than we can imagine. Social Dividend is now possible because of all the accumulated “civilizational” knowledge humans have. Machines (which embody this accumulated knowledge) do most of the physical work now.
Mansoor
The is a content of an email message I sent to my friend Patrick Beltran today:
Patrick,
Here is how the banker's game works:
1) Get the government to issue some currency (cash -- paper or reserves at the central bank -- reserves are government issued cash central bank deposits). Government issued cash is around 5% of the currency (money) supply. The government issued currency is put into circulation by the government simply spending it.
2) The rest (95%) of the currency is issued by the private banks. Each customer loan is a new bank deposit (i.e., new currency) and increases the currency (money) supply of the economy. Note that this newly created money (currency) is put into circulation by the borrower spending it. Most currency (about 95% America's currency supply) has been borrowed into existence and when bank customer pays the loan back that amount of currency is removed from circulation. The banking system cannot go backwards (fewer net loans) as time moves on because fewer net loans means fewer currency in circulation in the economy.
Accmulation of interest charges on outstanding loans means that the currency supply must constantly increase even if it means giving out lower quality loans. Think of it like a plane flying it must fly at some minimum speed or else the plane (the banking system) will crash (i.e., banking system collapse).
3) The bankers make dam sure that the common public does not understand how the monetary system works meaning that the private banks issue 95% of the currency. This is whole another topic how they do this.
4) The system works until real economic capacity of the economy grows and debts can be serviced and interest charges paid. Most of the time the economy oscillates between boom (growth) and bust (recession) because bust is needed to clear debts and start a new lending cycle.
5) Eventually, one of these cycles goes so deep that currency supply (and demand) falls so low that too many debts become un-serviceable. The recession becomes a depression now.
6) The bankers then have to decide how to "reset" the system. One way to reset the system is to let the depression takes its course. But of course this path is very chaotic because people lose jobs and may become violent. Once most debts are cleared lending can start again and the currency supply is replenished. Wars are a good way to get initial money (currency) into an economy after a depression to get demand going again. This is the great depression scenario.
7) Another way to "reset" the system is to get the government to print too much money and spend and destroy the currency and blame it on the government. This justifies issuance of a new currency (note that hyperinflation clears debts) and the lending cycle can start again.
8) The banking system (as is) is setup to maximize the power and influence of the global bankers and NOT for the maximum general well being of people. By the way this is a global game. This is the only system around no matter what country you are in. The global banking cartel makes sure that no competing systems are allowed to exist (so they might be copied and global bankers will lose power).
9) When it comes to understanding how the monetary system works and how money relates to the goods and services production process most of humanity (by far) lives in a matrix. Yes. I feel like Neo (and yes I have found my Trintiy).
Mansoor H. Khan
On Saturday, October 8, 2011 10:35 PM I sent the following email message to my friend Ebaad:
Ebaad,
salam Alaikum,
please read and send to your son.
Mansoor
Here is how the banker's game works:
1) Get the government to issue some currency (cash -- paper or reserves at the central bank -- reserves are government issued cash central bank deposits). Government issued cash is around 5% of the currency (money) supply. The government issued currency is put into circulation by the government simply spending it.
2) The rest (95%) of the currency is issued by the private banks. Each customer loan is a new bank deposit (i.e., new currency) and increases the currency (money) supply of the economy. Note that this newly created money (currency) is put into circulation by the borrower spending it. Most currency (about 95% America's currency supply) has been borrowed into existence and when bank customer pays the loan back that amount of currency is removed from circulation. The banking system cannot go backwards (fewer net loans) as time moves on because fewer net loans means fewer currency in circulation in the economy.
Accmulation of interest charges on outstanding loans means that the currency supply must constantly increase even if it means giving out lower quality loans. Think of it like a plane flying it must fly at some minimum speed or else the plane (the banking system) will crash (i.e., banking system collapse).
3) The bankers make dam sure that the common public does not understand how the monetary system works meaning that the private banks issue 95% of the currency. This is whole another topic how they do this.
4) The system works until real economic capacity of the economy grows and debts can be serviced and interest charges paid. Most of the time the economy oscillates between boom (growth) and bust (recession) because bust is needed to clear debts and start a new lending cycle.
5) Eventually, one of these cycles goes so deep that currency supply (and demand) falls so low that too many debts become un-serviceable. The recession becomes a depression now.
6) The bankers then have to decide how to "reset" the system. One way to reset the system is to let the depression takes its course. But of course this path is very chaotic because people lose jobs and may become violent. Once most debts are cleared lending can start again and the currency supply is replenished. Wars are a good way to get initial money (currency) into an economy after a depression to get demand going again. This is the great depression scenario.
7) Another way to "reset" the system is to get the government to print too much money and spend and destroy the currency and blame it on the government. This justifies issuance of a totally new currency (note that hyperinflation clears debts) and the lending cycle can start again. This is the Weimar scenario.
8) The banking system (as is) is setup to maximize the power and influence of the global bankers and NOT for the maximum general well being of people. By the way this is a global game. This is the only system around no matter what country you are in. The global banking cartel makes sure that no competing systems are allowed to exist (so they might be copied and global bankers will lose power).
Mansoor H. Khan
I made the following comment on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/09/marriner-eccles-on-the-need-to-save-the-rich-from-themselves.html#comment-478297
mansoor h. khan says:
September 25, 2011 at 8:40 am
“Interesting paper. I’m glad to see the idea of a general bailout, including savers, is spreading. Thanks.”
Yes. But lets not forget post general bailout as you describe we should also reform the banking system so money is created by the government debt-free and private money creation is made illegal.
Also, we should not give the impression that a “general bailout is a gift to the population”. It would not be a gift it is simply justice done (giving their own money back to them) for this FRB bullshit banks have perpetrated on the people of the world for centuries.
Mansoor
F. Beard says:
September 25, 2011 at 12:18 pm
we should also reform the banking system so money is created by the government debt-free mansoor h. khan
Absolutely! Government should never borrow money.
and private money creation is made illegal. mansoor h. khan
Without government privilege for the banks, such as a lender of last resort, their ability to leverage would be greatly limited. Still I would not lose any sleep if so-called “bank credit” was outlawed. However, I would not ban private money creation. I see private money creation as a fundamental economic right. The problem is that the banks have a government enforced monopoly on private money creation. Plus there are non-usury forms of private money such as common stock that “share” wealth and power rather than reap it.
Also, we should not give the impression that a “general bailout is a gift to the population”. It would not be a gift it is simply justice done (giving their own money back to them) for this FRB bullshit banks have perpetrated on the people of the world for centuries. mansoor h. khan
Totally agree. FRB has cheated everyone – borrowers, savers and the poor
I made the following comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/09/marriner-eccles-on-the-need-to-save-the-rich-from-themselves.html#comment-478456
September 25, 2011 at 1:28 pm
Xylix says:
“All savings (fiscal*) is someone else’s debt.”
Only in the current design of the system (most money originates when a loan is issued) you are correct. But it does NOT have to be this way.
Money is really equity. Because of government sponsored deposit insurance and implicit government bailout guarantee the potential claim represented by private bank issued money on real goods and services is everybody’s obligation (all citizens of state).
Money is equity and dependent on the economic performance of the state. It’s value must be regulated for it be useful by creating more of it (in times of deflation) and destroying some (in inflationary times).
All you have to do is make a “threat to discontinue deposit insurance” and you see that money is a social contract (a relationship).
Government sponsored deposit insurance and implicit government bailout guarantee of banks make money a “public property” and not “a private property”. The bankers use public property to generate income. And that is not only thing. Their game also cause recessions and depressions.
There is not need for us to live this way!
Mansoor
I made the following comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/10/quelle-surprise-gao-finds-the-fed-is-a-club-of-backscratching-well-connected-white-bankers.html#comment-499882
mansoor h. khan says:
October 21, 2011 at 4:58 am
There is another way:
1) Make the FED part of and subservient to the government.
2) Allow the government to issue currency in all forms (coins, paper bills and bank deposits).
3) Outlaw Fractional Reserve Banking. Make all bank deposits 100% reserve government issued money.
4) Abolishing the FED will lead to very unstable pre-FED like banking. Banks runs and bouts of extreme deflation.
5) The government can fight deflation via increased government spending or just by “increasing” citizens’ bank account balance.
6) The government can fight inflation by decreasing government spending and/or taxing and destroying currency.
Mansoor
I made the following comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/10/marx-versus-capitalism-versus-you.html#comment-502104
mansoor h. khan says:
October 23, 2011 at 12:13 pm
Jose and JonboinAR,
Here is how see the “real” problem that humans have:
1) Our right brains (the imaginative, the philosophical, the artistic part) CAN conceive of perfection and infinity (perfect peace, perfect justice, material abundance, infinite life, etc).
2) But our left brains cannot deliver on this vision that the right brains is able to conceive. The left brain is what deals directly with the natural world (logic, management, creation of actual goods and services).
Why would our creator make our brains like this?
I don’t think animals have this issue.
Mansoor
I made the following comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/10/the-verboten-story-of-argentinas-economic-success.html#comment-502250
mansoor h. khan says:
October 23, 2011 at 4:31 pm
F. Beard said”
“That is a more difficult sell since price inflation measurement is controversial.”
Yes. But long term we have to teach humanity that in a money economy Say’s law is not true (or anywhere near it). What workers get paid and even what business owners make even if completely spent is not sufficient to use-up (liquidate) the production capacity of a modern economy.
That is what banks do they issue credit (new currency) to use-up this slack capacity of the economy. But there is no reason to have banks do this (this is what leads to recessions/depressions) as peak credit causes no more ability to borrow and lowered production of goods and services due to lowered demand (spending).
For centuries banks have propagated this lie. The proper thing to do is to come up with acceptable way to measure inflation and let the government (not banks) use-up the slack capacity of the economy for social good which could include regular monthly checks to the citizenry.
Mansoor
I made the following comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/10/helicopter-geithners-ny-fed-40-billion-iraq-money-drop.html#comment-504494
mansoor h. khan says:
October 26, 2011 at 7:23 am
Yes. This idea is called “social credit”. By Clifford H. Douglas (1879 – 1952).
Also, this idea is consistent with MMT ideas and Keynes’ model of relationship between demand, money, inflation and the goods and services production process.
http://en.wikipedia.org/wiki/Social_Credit
The only possible fly in the ointment is peak oil. Keynes’ model assumes essentially limitless natural resources with spending (with new money or existing money) metered to minimize inflation.
Actually, peak oil makes this idea even more relevant because fractional reserve banking is not sustainable without growth (based on limitless natural resources).
I not sure our current “screwed up” economic situation is because of peak credit (like during the great depression) or peak oil. Either way, FRB needs to go the way of the dodo bird and money (currency) needs to be serve humanity rather than humanity serving the banking cartel!
Mansoor
I made the following comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/10/european-summits-in-ivory-towers.html#comment-505171
F. Beard says:
October 27, 2011 at 2:23 am
Governments should have nothing to do with banks other than to punish them for fraud and enforce the laws against insolvency.
There should be:
1) No lender of last resort.
2) No government deposit insurance.
3) No government borrowing.
4) A government provided, risk-free, fiat storage and check clearing service that makes no loans and pays no interest.
“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.” Josiah Charles Stamp quote from http://freedomforall.net/director-of-bank-of-england-says-banking-was-conceived-in-iniquity-and-was-born-in-sin/
Really now. We can’t do better than a money system based on usury and theft of purchasing power (especially from the poor) and that requires both heavy government privileges and heavy regulation?
Reply
mansoor h. khan says:
October 27, 2011 at 7:32 am
F. Beard,
You will also need to protect the public by outlawing FRB from shadow banks (e.g., non-FDIC insured money market mutual funds). Shadow banks indirectly expand the money supply and expect to get bailed out when they get caught “with their pants down” (i.e., when there is a run on their deposit balances or when they acquire bad assets).
I am ok with private monies. But this would be a much bigger adjustment (change in tax laws, tax collection methods, etc.)
Even if there were private monies I strongly suspect that government issued fiat in bank deposit form will come out as a winner due to the strong desire of most people to NOT take risks. Which means that the government will be able to deficit spend without creating inflation.
Mansoor
Today I made the following comment on Naked Capitalism blog web site:
http://www.nakedcapitalism.com/2011/11/philip-pilkington-debunking-economics-%E2%80%93-an-interview-with-steve-keen-%E2%80%93-part.html#comment-529254
mansoor h. khan says:
November 16, 2011 at 12:30 pm
Susan the other,
I see it as a root of much evil but not all evil.
When(god willing) currency issuance becomes equity based (spent into existence by government or given to people who will then spend it into existence) then interest rate on lending (not insured lending when deposit insurance is revoked) will be much much higher. This in itself will greatly greatly reduce fractional reserve lending and lending in general.
It is not possible to remove all evil until the day of judgement.
Mansoor H. Khan
Last month at a lunch meeting my christian friend Suneeta Sagar commented that Christianity and Islam are very close in their understanding of how the universe works.
That made me think, hmmm, what is the difference?
I will take shot at this question.
Christianity = Islam Light
Islam = Christianity on Steroids
Mansoor
A few years ago I learned that the original name of Hinduism is Sanatana Dharma (Eternal Truth in sanskirit).
To me:
Eternal Truth = Limitless Mercy = Creator of Universe = One True God = Bhagwan = God of Abraham
Mansoor
Another comment I made on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/philip-pilkington-debunking-economics-%E2%80%93-an-interview-with-steve-keen-%E2%80%93-part.html
mansoor h. khan says:
November 16, 2011 at 6:34 pm
Paul Tioxon,
The eastern version of “I think, therefore I am” is:
Don’t eat for three days and you will get your answer (if you exist or not)!
Mansoor H. Khan
These series of related comments were made yesterday on Naked Capitalism blogpost by myself and others:
http://www.nakedcapitalism.com/2011/11/philip-pilkington-debunking-economics-%E2%80%93-an-interview-with-steve-keen-%E2%80%93-part.html#comment-528808
Mattski says:
November 16, 2011 at 6:37 am
It’s market fundamentalism, and like religion, it is ideology.
Reply
mansoor h. khan says:
November 16, 2011 at 7:01 am
Mattski,
Everybody has some kind of an ideology of everything around them (it is their mental model of the universe which helps them navigate it day-to-day). So what is yours?
The purpose of blogging is to be open to change so one can build an ideology in their minds that is closer to reality.
Mansoor H. Khan
Reply
Travizm says:
November 16, 2011 at 7:21 am
Think you’ve taken one to many neoclassical courses to the head Mansore!
SK = class act.
Science needs to take the power back.
Reply
mansoor h. khan says:
November 16, 2011 at 7:34 am
Travizm,
sure. here is my idea:
http://seekingalpha.com/article/209386-modern-monetary-system-there-is-another-way
Mansoor H. Khan
Reply
Susan the other says:
November 16, 2011 at 12:18 pm
Mansoor, your new electronic storage seems to amount to a new currency. You sound a bit like F. Beard. Just curious about your take on interest. Do you see it as the root of all evil too?
mansoor h. khan says:
November 16, 2011 at 12:30 pm
Susan the other,
I see it as a root of much evil but not all evil.
When(god willing) currency issuance becomes equity based (spent into existence by government or given to people who will then spend it into existence) then interest rate on lending (not insured lending when deposit insurance is revoked) will be much much higher. This in itself will greatly greatly reduce fractional reserve lending and lending in general.
It is not possible to remove all evil until the day of judgement.
Mansoor H. Khan
Marat says:
November 16, 2011 at 10:58 am
In the Aristotelian sense? Thats just not true!
Reply
mansoor h. khan says:
November 16, 2011 at 12:13 pm
Marat,
I don’t know what you mean?
Mansoor H. Khan
Reply
These series of related comments were made yesterday on Naked Capitalism blogpost by myself and others:
http://www.nakedcapitalism.com/2011/11/planning-on-heating-your-home-this-winter.html#comment-533232
F. Beard says:
November 19, 2011 at 11:36 am
Ha, ha!
All we are short of is money to pay off onerous debt and every one acts like it is the end of civilization!
Question? Are we willing to let our civilization die because of bookkeeping entries?
The current system which requires exponential growth just to pay usury is destructive but it’s not a problem we cannot solve.
mansoor h. khan says:
November 19, 2011 at 1:16 pm
F. Beard,
Its funny how you never mention asking help from the one who knows how to solve all problems!
Mansoor
F. Beard says:
November 19, 2011 at 2:46 pm
Its funny how you never mention asking help from the one who knows how to solve all problems! mansoor h. khan
Really? I quote the Bible on economic blogs more than anyone I know except Jesse over at his Cafe.
I freely admit that nearly all my ideas on ethical money creation and a general bailout come from the Bible, from both Old and New Testaments.
mansoor h. khan says:
November 19, 2011 at 5:18 pm
F Beard,
I was thinking you might encourage others to ask him for help too since we don’t know whose prayers might get accepted.
Mansoor
Another comment I made on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/satyajit-das-extortionate-privilege-%E2%80%93-america%E2%80%99s-fmd.html#comment-538449
November 22, 2011 at 10:29 pm
briantheprogrammer,
The reason most people have a huge problem with MMT is because MMT is accounting of some reality. But you haven’t explained the reality itself (i.e., the relationship of currency to the production process).
We need to come up with a very simple childlike explanation of Keynesian economics. Something like:
step 1: spending of currency generates demand (does not matter where the currency comes from, existing from savings or printed by government or printed by a bank).
step 2: entrepreneurs react to this demand signal in step 1 above and make stuff and provide services. Entrepreneurs (and workers) can and will work just to accumulate currency itself (for future buying).
Mansoor H. Khan
mansoor h. khan says:
November 22, 2011 at 9:46 pm
R Foreman,
Banks don’t loan existing government money they issue new currency (i.e., counterfeit).
It would be better to let them counterfeit and let them spend money in the economy debt free (let them live like kings). At least we would not have recessions and depressions.
Mansoor
Reply
F. Beard says:
November 22, 2011 at 10:24 pm
It would be better to let them counterfeit and let them spend money in the economy debt free (let them live like kings). mansoor h. khan
Yes but a better way is for corporations to spend their common stock as money.
So why don’t corporations do that now? Why should they when the government backed counterfeiting cartel is available for them to borrow from?
Reply
mansoor h. khan says:
November 22, 2011 at 10:37 pm
F. Beard,
I am just trying to propose a transitional deal (a treaty – even if it is one sided) with the banking cartel.
Future generations can move toward even more just solution.
Baby steps!
Mansoor
Reply
F. Beard says:
These series of related comments were made yesterday on Naked Capitalism blogpost by myself and others:
http://www.nakedcapitalism.com/2011/11/haldanemadouros-what-is-the-contribution-of-the-financial-sector.html#comment-538400
November 22, 2011 at 10:46 pm
Actually you are doing a good job of mocking our current system; it would be better if banks just spent money into circulation rather than lend it.
But we already have an institution for spending money into existence – government.
mansoor h. khan says:
November 22, 2011 at 10:49 pm
F. Beard,
I mock to help the people break out of this “matrix”. So they can think about curreny/money correctly.
Until the public’s thinking is correct (about how money works) the cartel will keep screwing us. That is how they rule: ignorance / lack of knowledge of the populace.
Mansoor
Reply
Today I made this comment on naked capitalism blog in response to another comment:
http://www.nakedcapitalism.com/2011/11/haldanemadouros-what-is-the-contribution-of-the-financial-sector.html#comment-538967
jonboinAR says:
November 23, 2011 at 8:23 am
You keep telling us where we need to get to. Now tell us how to get there, if you would. That’s the rub, right away, ain’t it?
Reply
mansoor h. khan says:
November 23, 2011 at 9:35 am
jobboinAR,
first educate, educate, educate … this is a new economic religion (evangelize / proselytize) and then;
http://seekingalpha.com/article/160269-a-radical-solution-for-america-s-insolvent-financial-system
mansoor h. khan
here is another comment i made on the naked capitalism blog:
http://www.nakedcapitalism.com/2011/11/satyajit-das-extortionate-privilege-%E2%80%93-america%E2%80%99s-fmd.html#comment-538449
mansoor h. khan says:
November 22, 2011 at 10:29 pm
briantheprogrammer,
The reason most people have a huge problem with MMT is because MMT is accounting of some reality. But you haven’t explained the reality itself (i.e., the relationship of currency to the production process).
We need to come up with a very simple childlike explanation of Keynesian economics. Something like:
step 1: spending of currency generates demand (does not matter where the currency comes from, existing from savings or printed by government or printed by a bank).
step 2: entrepreneurs react to this demand signal in step 1 above and make stuff and provide services. Entrepreneurs (and workers) can and will work just to accumulate currency itself (for future buying).
Mansoor H. Khan
Here is a very good comment/plan/recommendation for changing our banking system from a very good commentator on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/satyajit-das-the-main-game-looms-the-problem-of-us-debt.html#comment-535664
F. Beard says:
November 21, 2011 at 6:16 am
The example of the household budget is just illustrative so that lay people can in some sense comprehend what the situation in the US is. jason
What’s he doing misinforming the public? That’s the last thing we need.
what is the solution that you propose? Jason
1) Abolish all government privileges for the banks. These include:
a) government borrowing.
b) a lender of last resort.
c) government deposit insurance.
d) legal tender laws for private debts.
e) the capital gains tax on potential private money alternatives.
2) Have the Federal Government provide a risk-free money storage and check clearing service for its fiat that paid no interest and did no lending.
3) Bailout the entire population equally (including savers) from all credit debt to the banks. This could be done without changing the size of the money supply (base money + credit) if:
a) All further credit creation was forbidden during the bailout period and
b) the bailout checks were metered to just replace existing credit as it is paid off.
4) Remove all legal impediments to genuine private money supplies for private debts.
Reply
F. Beard says:
November 21, 2011 at 6:19 am
5) Payoff the US National Debt as it comes due with new fiat.
6) Fund all future US Government deficit spending with new fiat.
A response to a commentator on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/11/haldanemadouros-what-is-the-contribution-of-the-financial-sector.html#comment-539004
skippy says:
November 23, 2011 at 8:48 am
You can get a loan to buy some land, but, still have to pay rent on it, till the loan is payed off. Interest – usury is just…renamed….word games.
Skippy…those with the the dosh, interpret, write the laws, go figure.
mansoor h. khan says:
November 23, 2011 at 10:53 pm
skippy,
Yes. Interest free loan is allowed. But in a bankruptcy situation the loan becomes an equity claim. The lien holder must share the proceeds and does NOT get his cut first. So if I purchased land for $10,000 and borrowed $2,500 (interest free) but was unable to pay but had paid back $500 then the land sold for $8,000. The lien holder would not get $2,000 but would get $1,600 only. The lien holder also suffers from the decline in value.
This creates a different (a better more responsible) social relationships (which is the goal of quran and sunnah).
Mansoor
A response to a commentator on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/11/philip-pilkington-debunking-economics-%E2%80%93-an-interview-with-steve-keen-%E2%80%93-part.html#comment-531089
Travizm says:
November 17, 2011 at 5:00 pm
Hi Mansoor,
4.89 : They desire that you should disbelieve as they have disbelieved, so that you might be (all) alike; therefore take not from among them friends until they fly (their homes) in Allah’s way; but if they turn back, then seize them and kill them wherever you find them, and take not from among them a friend or a helper.
Do you believe in this?
Reply
mansoor h. khan says:
November 23, 2011 at 9:09 pm
Travizm,
Dude. The meccans had declared total war on the muslims. Allah gave permission to fight them. Quran was revealed over 23 years and each revelation has a very in a specific context. many parts of the quran cannot be understood without first learning the seerah (the context of the revelation).
Mansoor
A response to a commentator on Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/11/will-50-cuts-hollow-out-the-military.html#comment-539838
mansoor h. khan says:
November 23, 2011 at 7:43 pm
Lambert Strether,
“Human nature is just that, Human.”
Yes. But that does not mean we cannot manage our natures better (become more peaceful and less destructive).
That is in fact should is the whole point of blogging. Self improvement (where self first is oneself, then self = family, then self = community and then self = humanity).
Mansoor
ambrit says:
November 23, 2011 at 8:56 pm
Mr Kahn;
I’m flattered to be mistaken for Mr Strether. I agree that the underlying purpose of blogging can be self improvement. This, however, assumes a degree of self knowledge on the part of the blogger. Your progression suggests the Eightfold Path, a worthy goal. I would join that persuit with a western goal, arete. Well explicated by Pirsig in his “Zen and the Art of Motorcycle Maintenance.” The persuit of excellence is itself an enlightening process. Human, as a descriptor, covers a great deal of territory, but implies unity. One human race, one human nature, and, now, in the age of globalization, one human history.
mansoor h. khan says:
November 23, 2011 at 9:19 pm
ambrit,
You forgot one major one: It also implies one god.
Mansoor
Another comment I made on Naked Capitalism blog post:
http://www.nakedcapitalism.com/2011/11/german-bund-action-goes-badly-bank-of-america-cds-spread-hit-new-high-eurosovereign-and-us-bank-spreads-widen-more-will-the-germans-finally-break-glass.html#comment-540703
mansoor h. khan says:
November 24, 2011 at 11:15 am
LeonovaBalletRusse,
My main idea is unchanged:
All money should be government money and modern money is a ledger entry.
Therefore, we need a ledger keeper (a government bank) and we should get rid of deposit insurance.
Doing this much will crumble the banking cartel and we will no longer have deep recessions and depressions.
Mansoor
Reply
LeonovaBalletRusse says:
November 24, 2011 at 11:23 am
mansoor h. khan – excellent summation, in a nutshell. There.
Reply
mansoor h. khan says:
November 24, 2011 at 12:14 pm
LeonovaBalletRusse,
Even MMTers need to learn that while their ideas are sound (meaning consistent with reality as described by Keynesian economics on how the currency relates to the goods and services production process) fundamental money reform is needed. All money should be government issued.
MMTiers will slowly learn that while their ideas are sound it is the banking cartel which is keeping the public confused.
Mansoor H. Khan
Another comment I made on Naked Capitalism blog post:
http://www.nakedcapitalism.com/2011/11/german-bund-action-goes-badly-bank-of-america-cds-spread-hit-new-high-eurosovereign-and-us-bank-spreads-widen-more-will-the-germans-finally-break-glass.html#comment-540689
mansoor h. khan says:
November 24, 2011 at 11:08 am
LeonovaBalletRusse,
Be more hopeful. I am being only partially serious by proposing such a solution in an attempt to mock the banking cartel and show others how ridiculous their game is and simple the solution is.
We don’t have a money scarcity problem! There is plenty real money (roads, infrastructure, farms, factories, trained willing able creative labor, knowledge, rule of law, police, fbi, internet, etc).
We have bookkeeping problem created by a usurious system possible only by fraud and deception of equating bank money to government money in peoples mind and lying to the people that governments issue money (truth is that most currency by far in circulation is issued by the cartel).
Mansoor H. Khan
Another comment on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/11/haldanemadouros-what-is-the-contribution-of-the-financial-sector.html#comment-541923
mansoor h. khan says:
November 25, 2011 at 6:06 am
Skippy,
“on ground does
not even come close to working like that.”
I have to agree with you on that. My brother in law says the same thing. Oh, it (islam) looks good on paper like Communism does but does not work in practice. My practicing elders tell me most of islamic history. Islam worked very well (700 to 1600?). Since 1600s then it has not worked as well as say the western way of life and thinking (overall).
I don’t have a good answer to this discrepancy. Other than to say the “god works in mysterious ways”. Anyway, please keep your heart and mind open to new ideas.
Thanks. Mansoor
Another comment on the Naked Capitalism blog post:
http://www.nakedcapitalism.com/2011/11/haldanemadouros-what-is-the-contribution-of-the-financial-sector.html#comment-541942
mansoor h. khan says:
November 25, 2011 at 6:48 am
Skippy,
But I pray for more than just a bridge everyday. I pray that the creator of the universe guide me, you, america, and then humanity. My heart desires that the guidance be in that order but of course I will accept another order.
Mansoor
Today I made the following comment on a Naked Capitalism blog post.
http://www.nakedcapitalism.com/2011/11/we-speak-on-pbs-newshour-about-why-no-bank-executives-have-gone-to-jail.html#comment-542678
mansoor h. khan says:
November 25, 2011 at 6:14 pm
Susan the other,
This a physics vs. math problem.
Physics = rate at which raw materials can be turned into finished goods = rate of economic growth
math problem = compounding of interest on debt outstanding = currency supply
That is the problem with the our banking system. Bankers know that if they don’t continue to lend the system will collapse. Net loan growth cannot be negative for too long. They are literally forced to continue to lend regardless of loan quality.
Since loans outstanding = currency supply
but if currency supply is decreasing for a sustained period of time then we will have a depression event (which is not pretty for the people or the bankers).
Way out: currency should always be spent into existence and never lent into existence.
see:
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
http://aquinums-razor.blogspot.com/2010/11/modern-monetary-theory-there-is-another.html
Mansoor
Today I made the following comment on a Rodger Mitchell Malcolm's blog post:
http://rodgermmitchell.wordpress.com/2011/11/25/a-new-group-brake-the-banks/comment-page-1/#comment-10053
mansoor h. khan says:
Your comment is awaiting moderation.
November 25, 2011 at 6:33 pm
Rodger,
The reason most people have a huge problem with MMT and MS is because MMT and MS are statements of accounting of some reality. But you haven’t explained the reality itself (i.e., the relationship of currency to the production process).
That is like giving someone an income statement and a balance sheet (the accounting) for a business they don’t know what it sells and how it makes its product or service (the reality).
We need to come up with a very simple childlike explanation of Keynesian economics. Something like:
step 1: Spending of currency generates demand (does not matter where the currency comes from, existing savings or currency printed by the government or currency printed by a bank).
step 2: Entrepreneurs react to this demand signal in step 1 above and make stuff and provide services. Entrepreneurs (and workers) can and will work just to accumulate currency itself as savings (for future buying).
Looked at this way the entire economy can be viewed as a giant converter/transformer of raw materials to finished goods and services with demand (as expressed by spending currency) as the driver.
Mansoor H. Khan
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
Yesterday I made the following comment on a Naked Capitalism blog post:
http://www.nakedcapitalism.com/2011/11/we-speak-on-pbs-newshour-about-why-no-bank-executives-have-gone-to-jail.html#comment-542678
mansoor h. khan says:
November 25, 2011 at 6:14 pm
Susan the other,
This a physics vs. math problem.
Physics = rate at which raw materials can be turned into finished goods = rate of economic growth
math problem = compounding of interest on debt outstanding = currency supply
That is the problem with the our banking system. Bankers know that if they don’t continue to lend the system will collapse. Net loan growth cannot be negative for too long. They are literally forced to continue to lend regardless of loan quality.
Since loans outstanding = currency supply
but if currency supply is decreasing for a sustained period of time then we will have a depression event (which is not pretty for the people or the bankers).
Way out: currency should always be spent into existence and never lent into existence.
see:
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
http://aquinums-razor.blogspot.com/2010/11/modern-monetary-theory-there-is-another.html
Mansoor
Today I made the following comment on a Naked Capitalism blog post:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543566
mansoor h. khan says:
November 26, 2011 at 9:30 am
F. Beard,
You are on the path but you need to take your ideas/thoughts further. Since we live longer and need more for our golden years we seek a “safe mutual” fund.
The safest “mutual fund” is currency itself. If we implement your ideas (which is perfectly ok with me) we will have lots of private currencies (some issued by private banks, some issued by counties, some issued by states) and of course one issued by the federal government.
Once the federal government sets up a government bank (and deposit insurance for private banks is revoked) which cannot lend money but only provide a safe storage of deposits and clear checks many, many, many people will see it as a “safe” mutual fund. This will drive demand for the new federal gov currency which means gov will be able to (and it should) spend / or give money away to citizens (i.e., Social credit).
The fed currency will then become a equity share in the U.S. economy. The hard part will be for the gov then to balance supply and demand (based on the capacity of the economy and control inflation). Deflation is easy to control (spend money and/or give social credit to citizens). The reverse (inflation) is hard to control. Gov spending will have to be reduced and/or taxation increased.
Mansoor H. Khan
Today I made the following comment on the Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543547
mansoor h. khan says:
November 26, 2011 at 9:11 am
ArmchairRevolutionary,
Please focus on this explanation of the economy:
“Looked at this way the entire economy can be viewed as a giant converter/transformer of raw materials to finished goods and services with demand (as expressed by spending currency) as the driver.”
Note that value is expressed by spending curreny (money votes). Spenders vote for what is value by spending on what they want and entrepreneurs deliver.
Mansoor H. Khan
Another comment on a Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543487
mansoor h. khan says:
November 26, 2011 at 8:03 am
Hal Roberts,
I agree with you. But let us prioritize. Banking fraud and usury and the economic depressions caused by banker’s deception is by far the biggest problem facing humanity today.
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
Mansoor H. Khan
Another comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543408
mansoor h. khan says:
November 26, 2011 at 6:53 am
F. Beard,
Very good F. Beard. This is the suggestion I have been waiting for from you. We can blog and educate (and we should do our part always) but if he does not want it. it won’t happen.
Mansoor
Another comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543592
mansoor h. khan says:
November 26, 2011 at 9:57 am
F. Beard ,
I wholeheartedly agree with what you said in the above two comments. But It is my expectation based on what I see with how easily business knowledge can be learned and taken and how easily business advantages erode now compared to past that common stock will be a poor “holder” of value (and advantage).
Which means that the knowledge which was taken (or stolen) by others will become more widely used in the larger economy which means that the safest common stock will become the new fed currency.
Mansoor
I made a comment Naked Capitalism blogpost:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543663
Maju,
Don’t give up too easily. Educate, Educate, Educate….your wife, your kids, your neighbors, your co-workers, your friends, your fellow church attenders, etc.(street level education is needed).
And once they get it ask THEM to do the same.
Start with something like this as an explanation for their economic woes:
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
This is new economic religion (evangelize / proselytize) and then and we can:
http://aquinums-razor.blogspot.com/2009/09/radical-solution-for-americas-insolvent.html
Mansoor Khan
A very insightful comment by a commentator on the Naked Capitalism blog:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543505
F. Beard says:
November 26, 2011 at 8:24 am
What do you think the effect of black market labor has on the legal Lowly laborer ? It robs him of his wages and jobs. Hal Roberts
That does not seem to be a problem during booms, does it? So why can’t we have steady economic growth? I haven’t got my McMansion yet nor have many others.
If you have a big fat portfolio you are most likely getting you share of that wealth distribution by way of Leverage. False Profit you are either ungrateful or suffer from a lack the knowledge about leverage. Hal Roberts
Leverage is essentially counterfeiting. It enables the banks, corporations, the rich and the “credit-worthy” to loot everyone else. It is also dangerous gambling that fuels unsustainable booms (Not that we can’t have steady prosperity but not with the current money system).
There are many facets to our problems … Hal Robert
Not really. Not according to Occam’s Razor. Instead there are just many symptoms or roots of evil from a single root – a fascist money system.
Another comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543748
mansoor h. khan says:
November 26, 2011 at 11:58 am
Susan the other:
I am surprised that is all you have to say?
Remember what I said earlier:
The scarcest resource is “creativity”.
We just don't know (yet) how to educate those around us so we can put an end to this monstrous banker created idiocy we have going and has been going for centuries.
Mansoor H. Khan
Another comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543884
mansoor h. khan says:
November 26, 2011 at 1:22 pm
Susan the other,
I think the founding fathers knew this kind of crap will happen from time to time. We can still use our democracy.
We just have to do street level education of how the economy works and how the monetary system relates to it. Forget about our universities and our current set of leaders and our mass media. They all have been captured by the bankers.
But we can do it (god willing). It is going to be long and hard road but it has tremendous benefits for our old age years and future generations.
We can still use the ballot box (eventually) once the street level education reaches a critical point.
Mansoor
Another comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-544036
mansoor h. khan says:
November 26, 2011 at 3:24 pm
be’emet,
It is our knowledge (engineering knowledge and management knowledge) and teamwork that is the true backing of our currency and the world economy.
But you already know that if you have had a job in life.
This “social arrangement” called money (currency) is just a tool to facilitate this process of creation of goods and services and to use-it (consume it).
What we teach in our economics books is banker bullshit designed to keep them in power. No other purpose.
Mansoor H. Khan
Yet Another Comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-544028
Mansoor H. Khan says:
November 26, 2011 at 3:13 pm
F. Beard,
It is a very simple equation:
Currency Supply = Deposit Balances = Loans Outstanding
The deception that has been going on for centuries is that;
Credit Money is Not Currency
The equation that needs to be broken is the following:
Deposit Balances = Loans Outstanding
The above equation is what is causing this bookkeeping armageddon.
The above statement is PURE deception and keeps the bankers in power.
Mansoor H. Khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543663
mansoor h. khan says:
November 26, 2011 at 10:47 am
Maju,
Don’t give up too easily. Educate, Educate, Educate….your wife, your kids, your neighbors, your co-workers, your friends, your fellow church attenders, etc.(street level education is needed).
And once they get it ask THEM to do the same.
Start with something like this as an explanation for their economic woes:
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
This is new economic religion (evangelize / proselytize) and then and we can:
http://aquinums-razor.blogspot.com/2009/09/radical-solution-for-americas-insolvent.html
Mansoor Khan
Another Comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543884
mansoor h. khan says:
November 26, 2011 at 1:22 pm
Susan the other,
I think the founding fathers knew this kind of crap will happen from time to time. We can still use our democracy.
We just have to do street level education of how the economy works and how the monetary system relates to it. Forget about our universities and our current set of leaders and our mass media. They all have been captured by the bankers.
But we can do it (god willing). It is going to be long and hard road but it has tremendous benefits for our old age years and future generations.
We can still use the ballot box (eventually) once the street level education reaches a critical point.
Mansoor
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-544069
mansoor h. khan says:
November 26, 2011 at 3:56 pm
LeonovaBalletRusse,
I was actually an IT consultant in Baton Rouge, Louisiana in 1997 doing Peoplesoft implementation for Cajun Electric Corp.
And believe it or not my client told me about it (the restaurant called mansoor). But I never visited it to verify.
Mansoor H. Khan
P.S. Mansoor in Arabic means victor (as in whom god made victorious).
Another comment at NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-544069
mansoor h. khan says:
November 26, 2011 at 4:55 pm
LeonovaBalletRusse,
Ballet,
Looks like you are well read. Have read Siddhartha by Hermen Hesse? If you want to know how a traditional indian mind thinks about the universe.
Mansoor H. Khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543702
mansoor h. khan says:
November 26, 2011 at 11:20 am
Maju,
Not passively. It is called knowledge. People without knowledge (the wrong mental model in their heads) will always react wrongly (in this case for the benefit of bankers).
The only solution: Correct the mental model of how the economy works in their heads!
http://aquinums-razor.blogspot.com/2011/08/what-is-relationship-of-money-to.html
Mansoor H. Khan
Another comment NC:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543487
mansoor h. khan says:
November 26, 2011 at 8:03 am
Hal Roberts,
I agree with you. But let us prioritize. Banking fraud and usury and the economic depressions caused by banker’s deception is by far the biggest problem facing humanity today.
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
Another NC comment:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543487
mansoor h. khan says:
November 26, 2011 at 8:03 am
Hal Roberts,
I agree with you. But let us prioritize. Banking fraud and usury and the economic depressions caused by banker’s deception is by far the biggest problem facing humanity today.
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
Another NC comment:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543408
mansoor h. khan says:
November 26, 2011 at 6:53 am
F. Beard,
Very good F. Beard. This is the suggestion I have been waiting for from you. We can blog and educate (and we should do our part always) but if he does not want it. it won’t happen.
Mansoor
More NC comments:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543566
mansoor h. khan says:
November 26, 2011 at 9:30 am
F. Beard,
You are on the path but you need to take your ideas/thoughts further. Since we live longer and need more for our golden years we seek a “safe mutual” fund.
The safest “mutual fund” is currency itself. If we implement your ideas (which is perfectly ok with me) we will have lots of private currencies (some issued by private banks, some issued by counties, some issued by states) and of course one issued by the federal government.
Once the federal government sets up a government bank (and deposit insurance for private banks is revoked) which cannot lend money but only provide a safe storage of deposits and clear checks many, many, many people will see it as a “safe” mutual fund. This will drive demand for the new federal gov currency which means gov will be able to (and it should) spend / or give money away to citizens (i.e., Social credit).
The fed currency will then become a equity share in the U.S. economy. The hard part will be for the gov then to balance supply and demand (based on the capacity of the economy and control inflation). Deflation is easy to control (spend money and/or give social credit to citizens). The reverse (inflation) is hard to control. Gov spending will have to be reduced and/or taxation increased.
Mansoor H. Khan
Reply
F. Beard says:
November 26, 2011 at 9:39 am
The hard part will be for the gov then to balance supply and demand (based on the capacity of the economy and control inflation) mansoor h. khan
True but with the allowance of private currencies that would only be a problem for the government and its payees and for those who had substantial savings in fiat. The government sector would thus have a strong incentive to police itself with respect to wasteful spending since if it did not then only it would suffer. The private sector would be unaffected, at least to the extent it used private currencies.
Reply
F. Beard says:
November 26, 2011 at 9:46 am
The fed currency will then become a equity share in the U.S. economy. mansoor h. khan
Speaking of equity shares, common stock is an ideal private money form that requires no usury, no fractional reserves and no precious metals. it is also democratic – to the extent that one owns shares. But if the government enforced money monopoly is broken then it should be expected that shares would be widely owned.
Reply
mansoor h. khan says:
November 26, 2011 at 9:57 am
F. Beard ,
I wholeheartedly agree with what you said in the above two comments. But It is my expectation based on what I see with how easily business knowledge can be learned and taken and how easily business advantages erode now compared to past that common stock will be a poor “holder” of value (and advantage).
Which means that the knowledge which was taken (or stolen) by others will become more widely used in the larger economy which means that the safest common stock will become the new fed currency.
Mansoor
Reply
F. Beard says:
November 26, 2011 at 11:02 am
…which means that the safest common stock will become the new fed currency. mansoor h. khan
Paradoxically, it would be the allowance of genuine alternatives for private debts that would ensure that. I would have plenty of faith in fiat IF I knew it was ethically created.
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-543830
F. Beard says:
November 26, 2011 at 12:46 pm
If the banks (and the corporations that borrow from them) had not cheated most of US out of a lifetime of purchasing power then we would be content to work for $8/hr since we would have plenty of savings or investment income.
IT ALL goes back to the thieving, government backed/enforced usury and counterfeiting cartel, our banking system.
Reply
Tyler says:
November 26, 2011 at 3:26 pm
Glad we’re on the same page about stripping the ability of the Federal Reserve to destroy our savings and rob us,
but if we were content to work for $8 an hour in a banker parasite free economy, the
humanistic handwringers and vote trollers and union busters were still promote immigration of people who would be happy to work for $2 an hour.
The race to the bottom in wages and quality of work that people put up with is all relative.
Let me be the first to wish you Merry Christmas.
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-544910
mansoor h. khan says:
November 27, 2011 at 8:25 am
JTFaraday,
We can create aggregate demand by:
1) massive infrastructure spending
2) “basic” free healthcare for all
3) $500 social credit per month for each every citizen
Of course we will have to watch inflation (especially energy prices) and re-adjust the taxation and/or spending.
mansoor h. khan
Another comment on NC:
http://rodgermmitchell.wordpress.com/2011/11/25/a-new-group-brake-the-banks/comment-page-1/#comment-10123
mansoor h. khan says:
Your comment is awaiting moderation.
November 27, 2011 at 9:44 am
We either believe in democracy or we don’t. If we do we start the street level education process. Yes, it may take a couple generations to get but at least we will get there (good willing).
Otherwise, lets give all power to a small group of wise men or a king and teach him/her and they hope that they will keep the somewhat society balanced.
Comment on Naked Capitalism:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-545110
Charles Yaker,
We either believe in democracy or we don’t.
If we do we should start the street level education process (economy, monetary system, etc.).
Yes, it may take a several generations to get there but at least we will get there (god willing).
Otherwise, lets give all power to a small group of wise men/women or a king and teach him/her and hope and pray that they will keep society somewhat balanced.
Mansoor H. Khan
comment on NC:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-545354
LeonovaBalletRusse says:
November 26, 2011 at 2:38 pm
Yes, don, the OWS process is very *Zen*: “Not this, not this, not this, …”
Reply
F. Beard says:
November 26, 2011 at 5:38 pm
That is the most succinct definition of Zen I have ever read.
Reply
mansoor h. khan says:
November 27, 2011 at 3:27 pm
F. Beard,
The hindu version says..go to the length and breadth of the universe and say not this to everything you find (neti, neti) and whatever is left is bhagwan (god).
mansoor
Another series of comments on NC by others and myself:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-545110
mansoor h. khan says:
November 27, 2011 at 11:02 am
Charles Yaker,
We either believe in democracy or we don’t.
If we do we should start the street level education process (economy, monetary system, etc.).
Yes, it may take a several generations to get there but at least we will get there (god willing).
Otherwise, lets give all power to a small group of wise men/women or a king and teach him/her and hope and pray that they will keep society somewhat balanced.
Mansoor H. Khan
Reply
Charles Yaker says:
November 27, 2011 at 11:47 am
Mansoor h. Khan.
Frankly I prefer democracy preferably as Sy Sim’s used to say with an educated. consumer . However, I don’t understand how your comments flow from my obviously flawed attempt at humor.
mansoor h. khan says:
November 27, 2011 at 12:51 pm
Charles Yaker,
your “government does not understand fiat” comment suggests electorate has not picked the right leaders.
Why? Is it because democracy does not work? I don’t think so.
Mansoor
Charles Yaker says:
November 27, 2011 at 4:37 pm
Mansoor h. Khan
The electorate is comprised of a large, possibly majority of people who get thier misinformation from the MSM and is mainly what has been called low information voters.Furthermore and possibly more importantlythe Congress of the US continues to ignore the wishes of it’s constituant’s in favor of lobbieists and corporate benefactors . I would also argue that the electorate believes many of the myths put forth by for lack of a better description I’ll call it the the Right wing noise machine.
Charles
mansoor h. khan says:
November 27, 2011 at 4:56 pm
Charles Yaker,
That is the whole point. When it comes to teaching how the economy works, high schools = no good, mass media = no good, our current set of leaders (FED RESERVE and CONGRESS = No good). I would go further and say even college economics departments = No good. How many of them teach MMT?
we should start the street level education process (economy, monetary system, etc.) that is needed. This means start teaching your spouse, kids, friends, relatives, co-workers, church members, etc.
Mansoor Khan
Another NC comment:
http://www.nakedcapitalism.com/2011/11/steve-keen-on-bbc-on-how-to-get-out-of-our-current-depression.html#comment-546152
mansoor h. khan says:
November 28, 2011 at 8:23 am
F. Beard,
You need continue hammer the point that:
Payment of principal and interest to the commercial banking system by a borrower reduces, destroys, removes from circulation the currency by amount equal to the principal and interest paid back!
That is why replacing base money coupled with credit money paid back coupled with stopping banks from creating more credit (currency) will NOT cause inflation.
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
Mansoor H. Khan
Reply
FJ_2 says:
November 28, 2011 at 11:12 am
Thanks for this clear simple sub-thread of Mr Beard’s points. I always have trouble understanding them exactly.
Who could oppose this? The only problem seems to be it doesn’t bail out the banks at everyone else’s expense, and so does not push everyone else further down, thereby raising the banks even higher.
Even the banks should support it, but maybe crushing the economy is their true hope?
On a different but maybe related note, maybe companies oppose healthcare for all even though it is so clearly in their interest in so many ways b/c it wouldn’t let them keep a boot on the neck of employees?
mansoor h. khan says:
November 28, 2011 at 11:33 am
FJ_2,
All praise belongs to god.
Mansoor H. Khan
Another comment NC:
http://www.nakedcapitalism.com/2011/11/steve-keen-on-bbc-on-how-to-get-out-of-our-current-depression.html#comment-546154
Brian,
“government printing money” meme is just fear mongering by the bankers. Banks print money (currency) everyday when they fund a loan request from a borrower.
In a given timeframe banks print far, far, far more money than government ever, ever, ever does.
Mansoor H. Khan
http://www.nakedcapitalism.com/2011/11/steve-keen-on-bbc-on-how-to-get-out-of-our-current-depression.html#comment-546157
mansoor h. khan says:
November 28, 2011 at 8:31 am
Brian (Dude),
fiat money is a claim. No actual goods and services were saved just traded for fiat. Proper adjudication of this claim requires the government to manage deflation and inflation.
Both are bad. deflation screws people like just inflation does.
Mansoor H. Khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/steve-keen-on-bbc-on-how-to-get-out-of-our-current-depression.html#comment-546656
mansoor h. khan says:
November 28, 2011 at 5:09 pm
Foobar,
Now we just have to convince the bankers to stop making the public and government officials all confused about how money works.
I am truly scared they would rather have us descend into third world status then realize the truth (the true nature of money and the fact that bankers issue currency and cause depressions).
Mansoor H. Khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/steve-keen-on-bbc-on-how-to-get-out-of-our-current-depression.html#comment-546584
mansoor h. khan says:
November 28, 2011 at 4:10 pm
F. Beard,
Again, please emphasize what matters is the productive capacity of the economy. Money is just an accounting system.
It is an authorization to allow the money holder to use up to certain amount of capacity of the economy. And if money is NOT spent real resources in the economy are NOT used no matter how much money is printed.
Mansoor H. Khan
Another Comment NC:
http://www.nakedcapitalism.com/2011/11/steve-keen-on-bbc-on-how-to-get-out-of-our-current-depression.html#comment-546157
mansoor h. khan says:
November 28, 2011 at 8:31 am
Brian (Dude),
fiat money is a claim. No actual goods and services were saved just traded for fiat. Proper adjudication of this claim requires the government to manage deflation and inflation.
Both are bad. deflation screws people like just inflation does.
Mansoor H. Khan
Series of Comments on NC:
http://www.nakedcapitalism.com/2011/11/does-smaller-government-create-more-jobs.html#comment-545086
Charles Yaker says:
November 27, 2011 at 10:41 am
I might add that it’s possible that the reason the governments don’t inform about the opposite sex virgins is because the governments are as ignorant of the vergin thing as they are about Fiat Currency.
Reply
mansoor h. khan says:
November 27, 2011 at 11:02 am
Charles Yaker,
We either believe in democracy or we don’t.
If we do we should start the street level education process (economy, monetary system, etc.).
Yes, it may take a several generations to get there but at least we will get there (god willing).
Otherwise, lets give all power to a small group of wise men/women or a king and teach him/her and hope and pray that they will keep society somewhat balanced.
Mansoor H. Khan
Reply
Charles Yaker says:
November 27, 2011 at 11:47 am
Mansoor h. Khan.
Frankly I prefer democracy preferably as Sy Sim’s used to say with an educated. consumer . However, I don’t understand how your comments flow from my obviously flawed attempt at humor.
mansoor h. khan says:
November 27, 2011 at 12:51 pm
Charles Yaker,
your “government does not understand fiat” comment suggests electorate has not picked the right leaders.
Why? Is it because democracy does not work? I don’t think so.
Mansoor
Charles Yaker says:
November 27, 2011 at 4:37 pm
Mansoor h. Khan
The electorate is comprised of a large, possibly majority of people who get thier misinformation from the MSM and is mainly what has been called low information voters.Furthermore and possibly more importantlythe Congress of the US continues to ignore the wishes of it’s constituant’s in favor of lobbieists and corporate benefactors . I would also argue that the electorate believes many of the myths put forth by for lack of a better description I’ll call it the the Right wing noise machine.
Charles
mansoor h. khan says:
November 27, 2011 at 4:56 pm
Charles Yaker,
That is the whole point. When it comes to teaching how the economy works, high schools = no good, mass media = no good, our current set of leaders (FED RESERVE and CONGRESS = No good). I would go further and say even college economics departments = No good. How many of them teach MMT?
we should start the street level education process (economy, monetary system, etc.) that is needed. This means start teaching your spouse, kids, friends, relatives, co-workers, church members, etc.
Mansoor Khan
Charles Yaker says:
November 27, 2011 at 6:14 pm
Mansion h. Khan
You and I are probably on different pages of the same book. The problem as I see it is we are all trying to win friends and influence people, unfortunately, we are not organized and have to. Much staff and a paucity of line. Possibly no line whatsoever. (staff and line being descriptions of positions in management, military and other hierarchical organizations) it’s like the two parts of Kirk in one of the shows from the original Star Trek series when his two parts are separated. In a transporter accident. The line side makes things happen e staff side makes sure it’s the right thing.
Charles
Another comment on NC:
mansoor h. khan says:
November 29, 2011 at 9:26 am
F. Beard,
You arrived at your fundamental monetary reform (abolishing the fascist money cartel) conclusion by considering the impact of usury.
I actually did not. I just don’t want any private businesses which cannot fail. Then I backed-into “deposit insurance” as the culprit which keeps these goons in power and then I backed into a need for a government bank for safe keeping of currency (money) with gov as the the ledger keeper.
How wonderful truth is. It is always consistent no matter which way you get to it?
Mansoor H. Khan
Comment on NC:
http://rodgermmitchell.wordpress.com/2011/11/29/is-newt-gingrich-a-closet-democrat/comment-page-1/#comment-10259
Mansoor H. Khan says:
Your comment is awaiting moderation.
November 29, 2011 at 11:34 am
Rodger, you said:
“I’m fascinated with the math that allows tax decreases plus spending increases to equal a balanced budget.”.
It is the math of “love of power” by the banking cartel.
As a mercy to mankind our creator put in “bug” in the math of compound interest (usury). The math of compound interest is never able to keep up with physics (growth of the real economy).
Depressions are a clue (evidence in the real laboratory of the world) that we need to change our currency issuance system (money creation system).
Mansoor H. Khan
Comment on Rodger Malcolm Mitchell blog:
http://rodgermmitchell.wordpress.com/2011/11/29/is-newt-gingrich-a-closet-democrat/comment-page-1/#comment-10259
Rodger Malcolm Mitchell says:
November 29, 2011 at 12:44 pm
That is the old: “Compound-interest-leads-to-infinity” belief that simply will not go away, no matter the evidence.
First, you use the word “usury” to describe any sort of interest — the biblical description. Now, several thousand years later, current usage describes “usury” as excessive or illegal interest.
Using an obsolete term, in an attempt at confusion, does exactly that: It confuses, just as saying air, earth, fire and water are the four “elements,” when “element” now has a completely different meaning.
As for economic growth not being able to keep up with interest, look around at reality. The United States is 235 years old, and economic growth has had no difficulty “keeping up.” In fact, today we are starved for the money interest creates.
Finally, bringing “our creator” into an economics discussion is the same as bringing God into any scientific discussion. It leads to invalid, unscientific conclusions, which neither can be proven nor disproven. See: Creationism.
I know I won’t convince you, because I suspect you have become enthralled with a quasi-scientific / religious, writer, who proposes an interest-free world as mandated by God. But I doubt there is data to support his beliefs, and his obsolete use of words is indicative of that.
Rodger Malcolm Mitchell
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Neil Wilson (@neilwilson) says:
November 29, 2011 at 1:33 pm
It’s actually a stock/flow comparison error.
People borrow money to invest, yes, but that creates a flow of economic activity (turnover) much greater than the actual amount of money borrowed (ie asset turn per year > 1).
That then generates wages per year and profits per year from which the interest per year is paid.
You can tell these people have never invested in a business.
0 0 Rate This
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Mansoor H. Khan says:
Your comment is awaiting moderation.
November 29, 2011 at 2:36 pm
Neil,
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
Why do we depressions?
My point is very simple: Money Supply = Gov Money + Bank Money
Why not grow Gov Money when Bank Money is shrinking or not growing fast enough?
Because issuance of bank money is much more profitable and gives more power to the private bankers.
Incentives are all wrong.
Mansoor H. Khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/german-bund-action-goes-badly-bank-of-america-cds-spread-hit-new-high-eurosovereign-and-us-bank-spreads-widen-more-will-the-germans-finally-break-glass.html#comment-542173
Eric says:
November 25, 2011 at 11:32 am
”meaning Germany’s addiction to running big trade surpluses”
wrong, meaning some Southern countries living beyond their means or borrowing for speculative investments (housing bubble)
Reply
mansoor h. khan says:
November 25, 2011 at 6:05 pm
Eric,
You are both right. That is the problem with the our banking system. Bankers know that if they don’t continue to lend the system will collapse. Net loan growth cannot be negative for too long. They are literally forced to continue to lend regardless of loan quality.
Since loans outstanding = currency supply
but if currency supply is decreasing for a sustained period of time then we will have a depression event (which is not pretty for the people or the bankers).
Way out: currency should always be spent into existence and never lent into existence.
see:
http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html
http://aquinums-razor.blogspot.com/2010/11/modern-monetary-theory-there-is-another.html
Mansoor
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-544069
mansoor h. khan says:
November 26, 2011 at 3:56 pm
LeonovaBalletRusse,
I was actually an IT consultant in Baton Rouge, Louisiana in 1997 doing Peoplesoft implementation for Cajun Electric Corp.
And believe it or not my client told me about it (the restaurant called mansoor). But I never visited it to verify.
Mansoor H. Khan
P.S. Mansoor in Arabic means victor (as in whom god made victorious).
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-544151
mansoor h. khan says:
November 26, 2011 at 4:55 pm
LeonovaBalletRusse,
Ballet,
Looks like you are well read. Have read Siddhartha by Hermen Hesse? If you want to know how a traditional mind thinks about the universe.
Mansoor H. Khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543884
mansoor h. khan says:
November 26, 2011 at 1:22 pm
Susan the other,
I think the founding fathers knew this kind of crap will happen from time to time. We can still use our democracy.
We just have to do street level education of how the economy works and how the monetary system relates to it. Forget about our universities and our current set of leaders and our mass media. They all have been captured by the bankers.
But we can do it (god willing). It is going to be long and hard road but it has tremendous benefits for our old age years and future generations.
We can still use the ballot box (eventually) once the street level education reaches a critical point.
Mansoor
Another on NC:
http://www.nakedcapitalism.com/2011/11/eurocarnage-continues.html#comment-543748
mansoor h. khan says:
November 26, 2011 at 11:58 am
Susan the other:
I am surprised that is all you have to say?
Remember what I said earlier:
The scarcest resource is “creativity”.
We just know (yet) how to educate those around us so we can put an end to this monstrous banker created idiocy we have going and has been going for centuries.
Mansoor H. Khan
Reply
Susan the other says:
November 26, 2011 at 12:59 pm
Mansoor, I just get weary thinking that we trusted them, gave them free rein and they screwed the system up so bad. I mean, it looks like they are even hiding very incriminating evidence about the way they have operated for 3 decades that go above and beyond CDSs and investment “securities”. I do believe in the future and I believe it will be a rational world. But all taxpayers are thinking the same thing about now: we don’t want to bail out private enterprises or quasi private enterprises, banks, etc. And all governments are being held hostage by the financiers. We just go in circles. (But I have been enjoying you and F. Beard today.)
Reply
mansoor h. khan says:
November 26, 2011 at 1:22 pm
Susan the other,
I think the founding fathers knew this kind of crap will happen from time to time. We can still use our democracy.
We just have to do street level education of how the economy works and how the monetary system relates to it. Forget about our universities and our current set of leaders and our mass media. They all have been captured by the bankers.
But we can do it (god willing). It is going to be long and hard road but it has tremendous benefits for our old age years and future generations.
We can still use the ballot box (eventually) once the street level education reaches a critical point.
Mansoor
Another Comment at NC:
http://www.nakedcapitalism.com/2011/11/journey-into-a-libertarian-future-part-i-%E2%80%93the-vision.html#comment-547487
mansoor h. khan says:
November 29, 2011 at 9:26 am
F. Beard,
You arrived at your fundamental monetary reform (abolishing the fascist money cartel) conclusion by considering the impact of usury.
I actually did not. I just don’t want any private businesses which cannot fail. Then I backed-into “deposit insurance” as the culprit which keeps these goons in power and then I backed into a need for a government bank for safe keeping of currency (money) with gov as the the ledger keeper.
How wonderful truth is. It is always consistent no matter which way you get to it?
Mansoor H. Khan
F. Beard says:
November 29, 2011 at 9:43 am
by considering the impact of usury. Mansoor H Khan
Actually, it was abolishing the theft by fractional reserves that got me interested in how money might be created ethically. Later I saw the problems with usury.
How wonderful truth is. It is always consistent no matter which way you get to it? Mansoor H Khan
“Yet wisdom is vindicated by all her children.” Luke 7:35 New American Standard Bible (NASB)
Another on NC:
http://www.nakedcapitalism.com/2011/11/journey-into-a-libertarian-future-part-ii-%E2%80%93-the-strategy.html
Comments on NC:
http://www.nakedcapitalism.com/2011/11/journey-into-a-libertarian-future-part-ii-%E2%80%93-the-strategy.html#comment-549243
mansoor h. khan says:
November 30, 2011 at 10:58 am
Philip Pilkington,
All you are doing is building a more complex model which is more “true” to reality and has different social implications than the “standard” model sold by our economics departments.
Ok. That just means much, much more education needs to be done with respect to:
1) what influences supply and demand (and sets prices).
2) how the monetary system relates to supply and demand and the production process (in particular Say’s law is not true, which is implicitly believed by most people).
What you are really saying is that our economics departments (and by extension all other institutions of our society) are either “stupid” or “captured” by the bad elements of our civilization.
Economics profession serves as the priesthood of the modern civilization and economics (money) has corrupted all social relationships (I would agree with that assessment and F. Beard would probably agree too).
What this means is that we need to get to work and start educating those around us. It may take long a time for our efforts to bear fruit. What else can we do?
Mansoor H. Khan
Another Comment of NC:
http://www.nakedcapitalism.com/2011/11/journey-into-a-libertarian-future-part-ii-%E2%80%93-the-strategy.html#comment-549750
mansoor h. khan says:
November 30, 2011 at 5:40 pm
patricia,
yes. we need to learn how to use our right brain more. It is said that left brain is logical and right brain is imaginative. But the way I think of the right brain is that the right brain executes a logic of much higher order and asks bigger questions than the left brain can ever do. It is the right brain that sets us apart from animals.
The right brain can pierce through a “matrix” (sophisticated lies).
Left:
1. Logical and Disciplined
2. Helps us to deal with the material world (hunger, need for water, shelter, etc.)
3. Embodies Discipline (the goods and services production process, the Judicial System, the Military)
4. Embodies physics and physical laws
5. Uses strict hierarchy
6. This is the focus of the old testament (eye for an eye!)
7. Symbolized by the Roman Empire and focus of Greek thought
8. Symbolized by the state (as opposed to the individual!)
9. Embodies submission and compliance (Opposite of freedom!)
10. Cold, strict and impersonal (opposite of warm, flexible and forgiving!)
11. Focuses on this life (as opposed to a possible after life!)
12. Has a difficult time with coming up with new models or theories or ways of solving problems
13. Is good a managing (but not good at leading)
14. The left brain will take a civilization over a cliff when the civilization encounters a problem requiring adjustment to the models executing (like a computer executes code) in the left brain if not restrained by the more “flexible” right brain
Right:
1. Creative and Imaginative and Artistic
2. Able to come up with fresh approaches, new models and new theories and new ways of thinking about the natural world
3. Embodies emotion (love and hate), falling in love, patriotism, empathy, motivation
4. Is able to increase the spirit, the desire to live, the desire to fight, the desire to carry on
5. Is able to conceive of infinity (in time and space) and even in power (able to conceive omnipotence)
6. Wants to procreate (one way to defeat death in a sense!)
7. This is the focus of the New Testament (mercy and forgiveness!)
8. Symbolized by the east and focus of much of eastern thought
9. Focuses on the individual and freedom of the individual
10. Is in control of person’s free will
11. Is good at leading
12. Is able to conceive of and focus on after life
I will go a step further and say that:
It is the right brain which guides and teaches the left brain. But left helps to keep the right nourished and healthy on the physical level.
Mansoor H. Khan
Another Comment on NC:
http://www.nakedcapitalism.com/2011/12/moslerpilkington-response-to-yanis-varoufakis-regarding-our-eurozone-exit-plan.html#comment-550419
mansoor h. khan says:
December 1, 2011 at 7:32 am
craazyman,
It is the flow (proper velocity of money) which keeps the stock value somewhat stable and therefore useful and fulfills its social function (as you state).
The flow has to be proper in space (geography – between various regions who use the same currency and across time – Germany is a surplus producer now – this should reverse over time and Greece should become the surplus producer and Germany surplus user — say in 10 years ).
Fractional Reserve Banking (Debt base Currency Creation/Issuance) is becoming obsolete.
The world economy is crying for fundamental money reform (money should be spent into existence and not lent into existence). ECB should print and give money to Greece/Spain/Portugal for social stability and peace (the most valuable assets in a society).
The problem is that incentives are wrong. It is very simple:
Money Supply = Gov Money (spend in existence) + Bank Money (lent into existence)
Less bank money issuance means less income and power for the global bankers.
Incentives are all wrong. Bankers would rather have a depression and re-start the lending cycle.
Mansoor H. Khan
Comments on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-iii-%E2%80%93-regulation.html#comment-550450
mansoor h. khan says:
December 1, 2011 at 8:12 am
Pete,
That is not completely true. Probably not even mostly true.
Wars are not only physical but also intellectual even those fighting don’t realize it sometimes.
Romans fought the Greeks and enslaved them. But in the end it is the Greek way of thinking that won the hearts of even the subsequent generations of Romans.
The Mongols invaded and disrupted the Islamic empire centered in Baghdad in the eleventh century. Later every single one of the invaders became muslim (it took 100 years to happen).
In the end it is the better world view (which gives one a more satisfying/better life) that is going to be victorious.
Don’t think of Victory in physical terms only. Physical dies. Worldview (culture/thoughts) live on.
Mansoor H. Khan
Another on NC:
http://www.nakedcapitalism.com/2011/12/former-award-winning-chase-banker-describes-predatory-mortgage-lending-practices.html#comment-550376
F. Beard says:
December 1, 2011 at 6:43 am
Because if we wish to push it aside and blame only the bankers – Lafayette
Occam’s Razor, history, logic, the Bible, mathematics and many of mankind’s greatest thinkers indicate that the banks are solely to blame.
Furthermore, banks are not even necessary for investment. Common stock allows the necessary economies of scale without usury.
Reply
mansoor h. khan says:
December 1, 2011 at 10:38 am
F. Beard,
It situation is even more beautiful than that. Money if spent into circulation rather than being lent in circulation will act as an equity share in the world economy.
Which means it will reveal its true natue (which deposit insurance hides). Therefore, money will start to emphasize our “connectedness” rather then how it falsely looks as to emphasizing our “individuality”.
How beautiful the universe is. When used correctly it will shine light on the good expressions of our individuality through the efficiency of its connectedness via markets.
Mansoor H. Khan
NC comment:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-iii-%E2%80%93-regulation.html#comment-550996
Democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.
John Adams, Letter, April 15, 1814
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.
Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-iii-%E2%80%93-regulation.html#comment-551975
mansoor h. khan says:
December 2, 2011 at 8:06 am
F. Beard,
you are not being fair. Building up to the Federal Reserve Act of 1913 were many, many blow-up of regional banks due to the lack of lender of last resort. This caused many, many deep regional economic depressions (again, due to the regional economy being starved of currency in circulation).
But instead of fundamental money reform (i.e., a ledger based non-lendable government bank account for safe storage of money) what we got is the Federal Reserve Act. Which increased the bankers many, many, folds. It stopped regional depressions but now we must have national/global depressions to deal with (due to currency supply shortage).
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-iii-%E2%80%93-regulation.html#comment-551983
mansoor h. khan says:
December 2, 2011 at 8:14 am
Tao Jonesing,
It is due to the un-Christianization of the west that liberals and liberal leaning people have very, very hard time recognizing evil in world. They just think, oh these people just need more education.
But it is a good thing that western people are finally recognizing the “evil” of our current world money system (i.e., bankers).
Mansoor H. Khan
another comment:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-552075
F. Beard says:
December 2, 2011 at 9:38 am
In more modern times, democracies have urged a strong state to tax rentier income and wealth,… Michael Hudson
Why not prevent the theft in the first place? What good does it do the victims if the villains have to pay high taxes? None?
Reply
Tao Jonesing says:
December 2, 2011 at 11:06 am
Excellent point. Letting the criminal keep most of his loot proves that crime does, in fact, pay.
Usury is the root of all evil.
Reply
mansoor h. khan says:
December 2, 2011 at 12:02 pm
Tao Jonesing,
More precisely, Arrogance (lack of humility) is the root of all evil.
Usury is just one tool that oppressors use to enslave the masses. But there are others (mass killing, torture, widespread lies spread through the media, racism, etc.).
Mansoor Khan
Another NC comment:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-552718
F. Beard says:
December 2, 2011 at 5:31 pm
The definition of “usury” is any interest charge.
But a bigger moral problem than usury is the lending of money into existence since this is essentially counterfeiting.
Reply
mansoor h. khan says:
December 2, 2011 at 6:03 pm
F. Beard,
You are not being fair to bankers here. The bankers claim that they are turning savings into investments and that they (via the FED and BLS) monitor inflation and keep it to a minimum.
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-552718
F. Beard says:
December 2, 2011 at 5:31 pm
The definition of “usury” is any interest charge.
But a bigger moral problem than usury is the lending of money into existence since this is essentially counterfeiting.
Reply
mansoor h. khan says:
December 2, 2011 at 6:03 pm
F. Beard,
You are not being fair to bankers here. The bankers claim that they are turning savings into investments and that they (via the FED and BLS) monitor inflation and keep it to a minimum.
Mansoor H. Khan
F. Beard says:
December 2, 2011 at 6:53 pm
that they (via the FED and BLS) monitor inflation and keep it to a minimum. Mansoor H Khan
Irrelevant. When banks lend money into existence they steal purchasing power from all money holders including and especially the poor. Otherwise, borrowers would have to pay honest interest rates to savers (which the poor especially need) or issue “shares” in their enterprise.
mansoor h. khan says:
December 2, 2011 at 7:20 pm
F. Beard,
I almost agree with you on this point. Let us say money reform happened as you (I) like (banks are barred from issuing currency only the government is allowed). If the velocity of money was not high enough we would have deflation.
I have thought long and hard about deflation and I believe deflation would discourage risk taking and investment and slow down business activity. And many money thinkers agree with me on this (but most Austrians vehemently disagree with me on this point).
Therefore, the government would have to issue more money to stop deflation (I like to call these equity shares) and that is ok with. These equity shares when newly issued should of course be used for general welfare and/or social dividend.
Keynes also thought is bad. Keynes thought that little inflation is actually better than any deflation due to “sticky” wages explanation (which I accept). And also because inflation is hard to measure (that last part is my thinking not Keynes’).
Therefore, even if banks are issuing currency into circulation (as they do today) and not causing inflation (essentially converting what would otherwise be unused capacity of the economy into investments) it is still far better to SPEND money into existence than LEND money into existence.
Why: BECAUSE THEN WE DON’T HAVE TO GO THROUGH DEPRESSIONS
Mansoor H. Khan
NC Comment:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-iv-%E2%80%93-the-journey-into-a-libertarian-past.html#comment-552876
mansoor h. khan says:
December 2, 2011 at 7:29 pm
liberal,
I agree with you money (banking) reform is not the only thing needed. Monopolies, Global Warming, etc are also needed to be dealt with.
But we should prioritize. Also, our guiding principle (at very, very high level) should be JUSTICE and MERCY.
Mansoor H. Khan
Another NC comment:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-552907
mansoor h. khan says:
December 2, 2011 at 7:48 pm
LeonovaBalletRusse,
No. All hearts are not equal due to free will. God is giving everyone a chance to develop faith in their hearts. Basically here is how I think about it:
Humility is a realization that ==> I can’t “completely” figure out the universe by myself via reasoning ===> Start looking for him ==> You find him via faith ===> once you find him he will help you remove the (rest)of arrogance and other bad stuff from your heart. It is a continuous improvement process.
Mansoor H. Khan
Another comment NC:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-552919
mansoor h. khan says:
December 2, 2011 at 7:54 pm
F. Beard,
I have come like the your “allow private currencies idea” (repeal legal tender laws) a lot. The Austrian in me (decentralize as much as possible to limit damage from abuse of power, which will happen) likes it.
I thank you for opening my mind to this idea.
Mansoor H. Khan
comments on NC:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-552260
mansoor h. khan says:
December 2, 2011 at 12:02 pm
Tao Jonesing,
More precisely, Arrogance (lack of humility) is the root of all evil.
Usury is just one tool that oppressors use to enslave the masses. But there are others (mass killing, torture, widespread lies spread through the media, racism, etc.).
Mansoor Khan
Reply
LeonovaBalletRusse says:
December 2, 2011 at 7:39 pm
Mansoor, is the cause of the latter not the former?
Reply
mansoor h. khan says:
December 2, 2011 at 7:48 pm
LeonovaBalletRusse,
No. All hearts are not equal due to free will. God is giving everyone a chance to develop faith in their hearts. Basically here is how I think about it:
Humility is a realization that ==> I can’t “completely” figure out the universe by myself via reasoning ===> Start looking for him ==> You find him via faith ===> once you find him he will help you remove the (rest)of arrogance and other bad stuff from your heart. It is a continuous improvement process.
Mansoor H. Khan
comment on NC:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-553091
mansoor h. khan says:
December 2, 2011 at 10:12 pm
Tao Jonesing,
You are correct. Arrogance is can creep up very easily on one. Yes. I need to be careful.
Islam says…arrogance is like this:
Imagine on a very dark night on very dark rock a very dark ant is climbing it. Arrogance in once heart can be hidden like this ant would be and so one needs to be very careful.
Please forgive me if I sound arrogant. I will try better next time.
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/michael-hudson-debt-and-democracy-has-the-link-been-broken.html#comment-553063
Tao Jonesing says:
December 2, 2011 at 9:52 pm
More precisely, Arrogance (lack of humility) is the root of all evil.
I guess you have all the answers.
Irony can creep up on you when you least expect it, Mansoor.
Reply
mansoor h. khan says:
December 2, 2011 at 10:12 pm
Tao Jonesing,
You are correct. Arrogance is can creep up very easily on one. Yes. I need to be careful.
Islam says…arrogance is like this:
Imagine on a very dark night on very dark rock a very dark ant is climbing it. Arrogance in once heart can be hidden like this ant would be and so one needs to be very careful.
Please forgive me if I sound arrogant. I will try better next time.
Mansoor H. Khan
another commenton nc:
http://www.nakedcapitalism.com/2011/12/rob-johnson-on-real-news-network-on-the-feds-lifeline-to-eurobanks-and-the-rationale-for-austerity.html#comment-554104
reslez says:
December 3, 2011 at 5:02 pm
MMT practitioners need to dump the banks and the national debt. There is no need for either.
A lot of MMTers could go along with that.
The real problem is our government is locked in a terrifying Siamese-twin embrace with finance. As long as this remains true it’s useless to try to implement MMT policies. If we tried the results would be as horrifying as what we have now. Instead of bailing out the population we’d have MMT funded wars and industry bailouts. The MMT job guarantee becomes Dickens-style workhouses and subcontracted prison labor.
So where do we start?
Reply
F. Beard says:
December 3, 2011 at 5:21 pm
So where do we start? reslez
1) Ban any further credit creation; this is essentially counterfeiting and is the source of our woes.
2) Bailout the entire population, including savers, equally at a rate AT LEAST equal to the repayment of existing credit. Continue till all private debt is paid off.
3) After the bailout is complete, then drain the reserves from the banking system by setting up a risk-free fiat storage and transaction service run by the US Treasury and abolish deposit insurance and the Fed. Then set the banks free again to extend credit but bearing all the risk themselves.
4) At the same time, remove all legal impediments to genuine private currencies, especially common stock since it shares wealth rather than reaps it.
As for the national debt, pay it off with new fiat as it comes again and never borrow again. A Constitutional Amendment is appropriate.
Comment on NC:
http://www.nakedcapitalism.com/2011/12/rob-johnson-on-real-news-network-on-the-feds-lifeline-to-eurobanks-and-the-rationale-for-austerity.html#comment-554274
mansoor h. khan says:
December 3, 2011 at 9:33 pm
F. Beard,
I would like you to clarify what you mean by “Continue till all private debt is paid off.”?
Private Debt =
1. Credit Money Borrowed from Regular Commercial Banks (FED member banks)
2. Credit Money Borrowed from Shadow Banks (i.e., money market funds)
3. Other non-deposit type borrowings (e.g., bonds)
4. Debt between private individuals
I think you mean until number 1 and number 2 are paid off?
Mansoor H. Khan
F. Beard says:
December 3, 2011 at 9:42 pm
I think you mean until number 1 and number 2 are paid off? mansoor h. khan
Yes, but I reckon that most debt is credit debt.
Comment on NC:
http://www.nakedcapitalism.com/2011/12/david-apgar-could-germany-be-right-about-the-euro.html#comment-554609
mansoor h. khan says:
December 4, 2011 at 5:54 am
Paul Tioxon,
“debt issuing capitalism can not be unbound with no upper limits on profit making”
But capitalism need not be debt issuing (debt based money issuing). It is also possible for the government to issue currency and hand it over to the capitalist in exchange for produced output. This scheme was worked out by economist Clifford H. Douglas in the 1920s in his book Social Credit. In fact, Keynes ideas are very much consistent with Social Credit Ideas. Even MMT is consistent with both Keynesian economics and Social Credit idea.
Given deposit insurance and lender of last resort currency even today is very much like equity since it is backed up by the future labor of the “entire population” ultimately.
Currency Supply = Deposit Balances = Loans Outstanding
The “= Loans Outstanding” part is not even necessary. We don’t need bankers to create deposits. Government can do it just fine.
Proof: Just remove deposit insurance protection and lender of last resort protection and the current system will crumble. This proves that the system is totally dependent on the “promise” (an equity claim) of the entire population and not just the “borrower” as bankers claim.
Money reform as outlined by F. Beard is the first giant step in fixing capitalism. The next step I think should be for the government to remove all impediments to other money (currency) alternatives (like legal tender laws).
This will decentralize money creation and distribute power (I would expect metal based currencies, city/county gov based currencies, state gov based currencies and other “creative ideas” to come from the marketplace).
Yes. Social credit based money will have other issues. The government will have to manage inflation (deflation is easy to manage). We need to teach humanity that money ultimately is an equity claim. This equity claim (of fiat currency) needs to be managed (adjudicated) by the currency issuer (the government). The adjudicating is determining who to tax and how much to tax to control inflation (when inflation ensues).
Mansoor H. Khan
comment on NC:
http://www.nakedcapitalism.com/2011/12/rob-johnson-on-real-news-network-on-the-feds-lifeline-to-eurobanks-and-the-rationale-for-austerity.html#comment-554663
mansoor h. khan says:
December 4, 2011 at 7:18 am
Mike Sax,
Let me try to explain:
Currency (Money Supply) = Deposit Balances = Gov Money + Bank Money
Bank Money = Credit Money = Loans Outstanding = Temporarily in Existence
Any money (bank deposit) used to pay a principle or interest back to a depository institution (like a commercial bank) will remove that bank deposit from circulation thus reducing the currency supply.
F. Beard is saying that we would calculate the amount of principle and interest expected to be paid back lets say in January 2012 and send a check to each Social Security Number (like the Bush stimulus payment) where the total of all checks will equal the amount of principle and interest expected to paid back to depository institutions. During this time depository institutions would not be able to create (issue) credit. However, they can lend any extra reserves they have.
Continue this process until credit money (bank issued money) goes to zero. Thereby, at the end of the process all money will be gov money (100% reserve banking system).
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/david-apgar-could-germany-be-right-about-the-euro.html#comment-554675
mansoor h. khan says:
December 4, 2011 at 7:29 am
Philip Pilkington,
Private bankers would rather have us (USA and Europe) go through a depression (to reset the system and re-create lending capacity).
A depression (ultimately) is more profitable and gives private bankers more power.
mansoor. h. khan
Another comment:
http://www.nakedcapitalism.com/2011/12/rob-johnson-on-real-news-network-on-the-feds-lifeline-to-eurobanks-and-the-rationale-for-austerity.html#comment-554708
JTFaraday says:
December 4, 2011 at 8:32 am
I think it’s a terrible idea. All it does is bailout the current highly corrupt financial system and sends the populace shopping. Whether they shop at amazon.com or TDAmeritrade when they’re done paying off Citibank and the Student Loan Corp makes no difference to me.
I want each and every legal and policy issue addressed in painful detail, not another mindless punchbowl that will end up who only knows where.
mansoor h. khan says:
December 4, 2011 at 9:02 am
JTFaraday,
Please understand the total money supply will not change.
Also, when 100% reserve situation is reached. A gov bank will be setup to provide safe-risk-free currency storage in a bank deposit form (ledger form) and check clearing will be performed by the treasury department. At that point all customer deposits from the commercial banking system will move to the new gov bank.
Deposit insurance will end. The FED will be disbanded. The banks will then be set free (Free Banking) and the free market will crush these goons (due to no gov deposit insurance and no lender of last resort). What could be better than that?
mansoor h. khan
Another comment on NC:
http://www.nakedcapitalism.com/2011/12/rob-johnson-on-real-news-network-on-the-feds-lifeline-to-eurobanks-and-the-rationale-for-austerity.html#comment-554746
mansoor h. khan says:
December 4, 2011 at 9:21 am
JTFaraday,
Ok. One major point F. Beard keeps making is that the current monetary system (bankers issuing currency via the fractional reserves process) steals purchasing power from all of us and gives it to the “credit worthy”.
This “stealing of purchasing power” will end and this means your income will be able to buy more goods and services.
Also, if you are a wage earner in a corporation. Post reform Corporations will be much more likely to offer you stock (in addition to cash) as part of your compensation because borrowing money post money reform will be very expensive (much higher interest rates will be demanded by banks).
If you are not a wage earner or don’t work for a corp (a small business or don’t make much). Well, as I explained earlier money will be able to buy more due to cessation of counterfeiting by the banks.
Beyond that if productivity increased the government can issue more currency without creating inflation and lower taxes and/or give money to each citizen (social dividend).
Beyond that if productivity did not increase and/or there was scarcity of energy supplies (due to peak oil or global warming response) then we as a “society” will have to have a serious discussion about how to “re-allocate” some of the output allocated by the market. This partial re-allocation will require increased taxation on high earners and a social dividend to low earners.
Mansoor H. khan
Another NC comment:
http://www.nakedcapitalism.com/2011/12/contagionex-is-for-you.html#comment-554711
R Foreman says:
December 4, 2011 at 8:09 am
Astounding (still) that many of the financial elite actually think this way. May God help our society in where we are headed.
Reply
mansoor h. khan says:
December 4, 2011 at 8:35 am
R Foreman,
True. May god guide us to understand our situation (in this case to understand how the economy/monetary system works).
If somewhat larger percentage (maybe 25%?) of the population understood the economy/monetary system the 1% would not be able to play this evil game.
lack of knowledge = Slavery
knowledge = freedom (release from bondage)
mansoor h. khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/david-apgar-could-germany-be-right-about-the-euro.html#comment-554937
Susan the other says:
December 4, 2011 at 12:30 pm
I like what you just said Mansoor. It gets close to a definition of money that I can almost grasp. Money is a symbol of equity. There is only equity and future equity. And to turn it on its head, to claim that it is the opposite of what it is, and make debt out of it, is the underlying corruption of the system. But I think I know there will always be a needy borrower and a willing lender in some capacity. Social Credit between individuals probably won’t exist. In an ideal world it should. In a truly productive world.
Reply
Susan the other says:
December 4, 2011 at 1:52 pm
…because debt obligations create a double jeopardy. It is not enough to pay off a transaction for financing with the social good the money will create. The interest on the debt and the debt itself must be repaid in addition to the social good. So who in their right mind would work to create the social good unless they could rlp some poor citizens blind in the process in order to make enough net profit?
Reply
mansoor h. khan says:
December 4, 2011 at 3:41 pm
Susan the other,
You are giving up on humanity far too easily like most people on this blog. Don’t get me wrong I do not thing UTOPIA (on earth) is possible.
But it IS possible to greatly improve our condition from what it is now. It is just matter of right knowledge and understanding of how the economy and currency (which is a social arrangement) really work.
But here is how social credit could work. Let us say we started with $500 per month per citizen. This is not enough to live on but for a family of four on average income it helps tremendously. It also helps businesses of all kinds in a deflationary environment. People will still want to work because $500 per month is not enough to kill the “look for work incentive”. Because I will still want my iphone and go on a ski trip.
It also help super producers (Capitalists). One thing a super producer craves for (besides power) is “fame”. Well if we encourage super producers to produce as much as they can and give them government issued money and also encourage (inspire) them to not consume (spend) much of what they produce then their bank account (which I would not even tax) will act like a “score” and give them “fame”.
The gov then can print and give social credit without touching the “super producer’s” score (bank account).
Look around you. Take Newtonian physics which says an object will keep moving forever unless something is done to stop it. This understanding totally contradicted everyday experience (at the time of Newton) yet here we are in 2011 and most our technology is built on Newtonian physics and even quantum physics and Relativistic physics is built on top of Newtonian physics (adjusted Newtonian physics).
mansoor h. khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/david-apgar-could-germany-be-right-about-the-euro.html#comment-555130
Susan the other says:
December 4, 2011 at 3:50 pm
I promise you Mansoor I am not giving up on us. And I am also not anti-corporation. I have faith in the basic human desire to create good.
mansoor h. khan says:
December 4, 2011 at 4:06 pm
Susan the other,
Good. I know we can do better because my faith tells me that there will be far more people in heaven than in hell. And it also tells me that hell will be destroyed after a certain amount of time (as mercy to those who end up in hell) but heaven is for infinity.
mansoor h. khan
comment on NC:
http://www.nakedcapitalism.com/2011/12/david-apgar-could-germany-be-right-about-the-euro.html#comment-555481
mansoor h. khan says:
December 4, 2011 at 11:19 pm
Calgacus,
Yes. But true nature of transaction is not debt (i will get back 1 cup of sugar). It is more like equity.
Fiat management requires open market operations and/or taxation to maintain the value of the monetary units which was exchanged for a cup of sugar to a cup of sugar.
In other words inflation (and deflation) must be dealt with by the government. Deflation is easy to deal with (just spend money and create inflation) until the same number of monetary units buys one cup of sugar.
Ok. How about inflation. Some inflation can be dealt with open market operations to attract investors to forgo current consumption in return for interest income.
I don’t think open market operations will always work to bring inflation under control. At least not without causing social instability. In some cases taxation may be required if baby boomers start spending in golden years and labor productivity and savings rate is not sufficient to balance supply vs. demand for real goods and services. In this case the government will have to tax away some of the spending power of earners to control inflation (even a consumption tax may be required).
This means while same number of monetary units buys one cup of sugar but I will have fewer number of monetary units in total because the gov taxed some away. Effectively, I don’t get same number of cups of sugar for my pot of money even though each singular cup cost the same number of monetary units.
This means what my savings/earnings buy (when I try to spend in the future) will change based on how the gov will maintain the aggregate supply and demand balance (i.e., control inflation).
If peak oil is true and effective energy output is constricted in the future this will be even more true. A consumption tax may be required on spenders to control inflation.
Mansoor Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-557041
mansoor h. khan says:
December 6, 2011 at 7:26 am
jake chase,
The real problem is that the right brain (our imaginative side) CAN imagine perfection and infinity (infinite life, infinite peace, infinite knowledge, infinite material abundance, infinite justice, etc.).
BUT
Our left brains (the logical/the execution side) cannot deliver on the right brain’s construction.
BUT continuous improvement is possible (and for humanity it may NOT be in a straight line).
Mansoor H. Khan
Another Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-557633
Tim says:
December 6, 2011 at 5:15 pm
“you must choose between science and religion”
Fail.
Plenty of instances dispute such a black and white assessment. A significant percentage of the scientific development in physics in the 19th and early 20th century, was from religious folks (not to mention Gallileo much earlier) who desired to understand “God’s creation” better.
The vast majority of individuals who are religious utilize their religion to positively motivate themselves towards constructive or philanthropic means. There are obviously individuals who have used religion to do the opposite. Again it’s the 99% vs the 1% thing. In the final analysis the human condition is suprisingly unaffected by religious beliefs if anything.
Reply
mansoor h. khan says:
December 6, 2011 at 11:30 pm
“you must choose between science and religion”,
People to need to read Thomas Aquinas more (1225 – 1274).
He is known for: “There is no conflict between faith and reason”.
The name of my blog Aquinum’s Razor: A Theory of Economics is named such to honor Thomas Aquinas.
Mansoor H. Khan
Reply
Another Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-558096
skippy says:
December 7, 2011 at 1:16 am
One works on belief, the other observable and measurable observations. Thousands of years…. persecuted seekers of fact were murdered, tortured, burnt, family’s killed, etc.
Skippy…stop commingling the accounts F. Corzine
Reply
F. Beard says:
December 7, 2011 at 4:59 am
…stop commingling the accounts F. Corzine skippy
And He said to him, “ ‘ YOU SHALL LOVE THE LORD YOUR GOD WITH ALL YOUR HEART, AND WITH ALL YOUR SOUL, AND WITH ALL YOUR MIND.’ Matthew 22:37 [bold added]
mansoor h. khan says:
December 7, 2011 at 5:14 am
Skippy,
Well according to the Quran the scripture should be/will be validated over time as humanity gains more experience.
Why:
Quran = Word of God
The Physical Universe = Word of God
The Quran says that god said: BE! and the universe instantiated (was created at that instant).
The spoken words of god should be consistent.
Mansoor H. Khan
comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-558000
Comment on NC:
http://www.nakedcapitalism.com/2011/12/philip-pilkington-libertarianism-and-the-leap-of-faith-%E2%80%93-the-origins-of-a-political-cult.html#comment-558941
Lidia says:
December 7, 2011 at 1:24 pm
This just sounds like escapism to me: replacing all the worldly “BIGS” in your life with a BIGGER, more psychopathic -albeit thankfully fictional- “BIG”.
This is exactly the problem: giving “BIGS” the time of day instead of doing all we can to subvert them, laugh them out of the room, or I-can’t-remember-the-NC-commenter’s-name who keeps wanting to see them frog-marched to the Hague. ;-))
Reply
F. Beard says:
December 7, 2011 at 2:12 pm
albeit thankfully fictional- “BIG”. Lidia
Really? How can one possibly appease an impersonal, unknowing, uncaring and lethal universe?
Reply
Lidia says:
December 7, 2011 at 6:54 pm
“How can one possibly appease an impersonal, unknowing, uncaring and lethal universe?”
Why would anyone want/need to “appease” the universe?
The word “appeasement” is already loaded with some sort of impossibly teleological impositions.
Reply
mansoor h. khan says:
December 7, 2011 at 6:39 pm
Lidia,
“doing all we can to subvert them, laugh them out of the room”
Yes. This is the job that needs to be done over and over and over again by almost each generation. God is an “equal opportunity employer”.
Mansoor H. Khan
Reply
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-557984
mansoor h. khan says:
December 6, 2011 at 11:12 pm
Justicia,
Is there no way to break out of the matrix? (i.e., matrix constructed by priests)
I believe there is. One of the commentators above said something about “empirical” evidence.
Eventually, people will notice that certain behaviors (i.e.,values, principles) work better than others because some people will deviate (even if a little) from how the priests behave.
And the the priests will be overthrown and replaced by new set of priests and process continues….
Mansoor H. Khan
Another Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-558007
mansoor h. khan says:
December 6, 2011 at 11:36 pm
Philip Pilkington,
In Mahayana Buddhism you should imagine yourself as a “a machine thinking”.
Remember Buddhism wants you to realize that you have no soul (a self independent of the physical and mental stuff).
Mansoor H. khan
Another Comment on NC:
http://www.nakedcapitalism.com/2011/12/philip-pilkington-libertarianism-and-the-leap-of-faith-%E2%80%93-the-origins-of-a-political-cult.html#comment-558941
Lidia says:
December 7, 2011 at 1:24 pm
This just sounds like escapism to me: replacing all the worldly “BIGS” in your life with a BIGGER, more psychopathic -albeit thankfully fictional- “BIG”.
This is exactly the problem: giving “BIGS” the time of day instead of doing all we can to subvert them, laugh them out of the room, or I-can’t-remember-the-NC-commenter’s-name who keeps wanting to see them frog-marched to the Hague. ;-))
Reply
F. Beard says:
December 7, 2011 at 2:12 pm
albeit thankfully fictional- “BIG”. Lidia
Really? How can one possibly appease an impersonal, unknowing, uncaring and lethal universe?
Reply
Lidia says:
December 7, 2011 at 6:54 pm
“How can one possibly appease an impersonal, unknowing, uncaring and lethal universe?”
Why would anyone want/need to “appease” the universe?
The word “appeasement” is already loaded with some sort of impossibly teleological impositions.
Reply
mansoor h. khan says:
December 7, 2011 at 6:39 pm
Lidia,
“doing all we can to subvert them, laugh them out of the room”
Yes. This is the job that needs to be done over and over and over again by almost each generation. God is an “equal opportunity employer”.
Mansoor H. Khan
Reply
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-558368
mansoor h. khan says:
December 7, 2011 at 5:14 am
Skippy,
Well according to the Quran the scripture should be/will be validated over time as humanity gains more experience.
Why:
Quran = Word of God
The Physical Universe = Word of God
The Quran says that god said: BE! and the universe instantiated (was created at that instant).
The spoken words of god should be consistent.
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-558423
mansoor h. khan says:
December 7, 2011 at 6:16 am
skippy,
I agree with you. Saying a thing does NOT validate it.
But certain things are being validated:
USURY ==> Civilizational Collapse
Certain other things are being invalidated (for the time being at least):
Creationism (because of the evidence of the theory of evolution on earth).
Yes. I don’t know why HE would want to confuse us.But I still believe in Creationism and think that (eventually) the discrepancy will be resolved by someone or (for sure) on the day of judgement.
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-558000
mansoor h. khan says:
December 6, 2011 at 11:30 pm
“you must choose between science and religion”,
People to need to read Thomas Aquinas more (1225 – 1274).
He is known for: “There is no conflict between faith and reason”.
The name of my blog Aquinum’s Razor: A Theory of Economics is named such to honor Thomas Aquinas.
Mansoor H. Khan
Reply
ebear says:
December 7, 2011 at 5:55 am
People to need to read Thomas Aquinas more (1225 – 1274).
He is known for: “There is no conflict between faith and reason”.
The fact that Aquinas made that statement suggests that there was. You don’t set out to reconcile something which is already in agreement. Aquinas was responding to a crisis – the same crisis that keeps cropping up and is never fully resolved because to do so is to admit the possibility that there is no God.
mansoor h. khan says:
December 7, 2011 at 6:19 am
ebear,
Good point.
Don’t know why HE would setup the universe so that there would be this conflict or any conflict.
All I can say at this point is: “He works in mysterious ways”.
mansoor h. khan
RanDomino says:
December 7, 2011 at 9:09 am
“He works in mysterious ways,” the classic cop-out. Why not just say faeries come along at night and sprinkle magic
Comment on NC:
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-557370
Joe Rebholz says:
December 6, 2011 at 1:12 pm
“Physics is based on binary logic too. All our thinking is.”
Philip, it is not true that all our thinking is based on binary logic. Read for example Daniel Kahneman’s “Thinking, Fast and Slow”.
http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-part-vi-%E2%80%93-certainty.html#comment-559445
mansoor h. khan says:
December 7, 2011 at 7:24 pm
Joe Rebholz,
That is because the reality is binary:
1. Creator (not us)
2. Creation (us)
However, in heaven all dichotomies will be destroyed!
But the one above will remain for infinity.
Therefore, distance between 1 and 2 above is infinity. We get ever close but cannot become 1. That is really the only rule of the universe when all said and done.
mansoor h. khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/philip-pilkington-libertarianism-and-the-leap-of-faith-%E2%80%93-the-origins-of-a-political-cult.html#comment-559142
Jim says:
December 7, 2011 at 3:36 pm
Here might be a few things to take into consideration when looking at Libertarian theory, Pilkington theory, Yves theory or my theory–from a metatheoretical angle.
As soon as theory(macrotheory or microtheory) strays from its preoccupation with and awarness of its own limits it devolves into ideology.
In order to proceed to a level of even provisional closure and to be able to theorize and explain a particular phenomenon, one must engender the illusion that all the returns are in.
Theorizing is largely negative, it consists of exposing limitations, rather than in clinching positive points.
What are considered so-called facts seem to constitute low-level theories.
There always seems to be a collusion of the descriptive and the normative.
Hayek, Pilkington, Yves or me or any of the commetariat tend to enjoy presenting our respective frameworks with an air of obectivity which tends to conceal a prior normative choice about the market or the state or the society.
Is the gap between words and things and events closed by acknowledging that there is an ineradicably normative dimension in every “descriptive” formulation?
What would be a model of political community built on the acceptance of openness(i.e. infinity) rather than closure?
Reply
PL_2 says:
December 8, 2011 at 12:04 am
Excellent.
Reply
mansoor h. khan says:
December 8, 2011 at 12:27 am
Jim said:
“What would be a model of political community built on the acceptance of openness(i.e. infinity) rather than closure?”
Just make sure it is closed enough that the rules are not so loose that we lose the “community” itself to something like “USURY” (otherwise known as bookkeeping Armageddon).
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/philip-pilkington-libertarianism-and-the-leap-of-faith-%E2%80%93-the-origins-of-a-political-cult.html#comment-559913
BenP says:
December 8, 2011 at 1:50 am
It’s usually good practise to have honestly engaged in the writings of the people you criticise – talking here about Marx.
“In Marxism this Evil Being is the capitalist”.
I reccomend you start with ‘The Communist Manifesto’ widely available for free online. In there you would see Marx *praises* capitalism and capitalists for the increase in wealth and productivity that working people created under it’s direction.
This is not to say there isn’t much to discuss around the topic “All I know is that I am not a Marxist”.
Sorry I wasn’t able to get much further which is not my normal experience at NC.
Reply
mansoor h. khan says:
December 8, 2011 at 7:25 am
BenP,
“It’s usually good practise to have honestly engaged in the writings of the people you criticise”.
Exactly,
Caring for the “truth” is the first step to a truly open mindedness.
Mansoor H. Khan
Comment on NC:
http://www.nakedcapitalism.com/2011/12/philip-pilkington-libertarianism-and-the-leap-of-faith-%E2%80%93-the-origins-of-a-political-cult.html#comment-558499
John Merryman says:
December 7, 2011 at 7:40 am
To give a thumbnail sketch connecting religion to economics, I would first point out the basic logical fallacy in the primary western religious assumption of monotheism; That the absolute, the universal state, is equilibrium, not apex, so a spiritual absolute would be the essence of being from which we rise, not an ideal from which we fell. Unfortunately this is a state, not a goal. In order to have anything, you have to have its opposite. Good/bad, up/down, left/right, positive/negative, yes/no, matter/anti-matter, conservative/liberal,dare I say, male/female, etc.
Otherwise, the happy medium is also just a big flatline on the universal heart monitor.
Physical reality is a bit of a convection cycle of (bottom up)expanding energy and (top down) contracting/consolidating mass/order/structure. In society, when there is a generally stable relationship between these two, it is a process of general advancement, but more energy than order and things branch out, for better or worse and more order than energy and they tend to break down and fall apart. A bit like riding a bicycle, you have to keep moving forward, or you fall over.
In large, complex societies these forces interact in innumerable ways. Labor, energy, material resources powering the larger society forward, or channeling into particular directions by those in positions of power.
The essential idea of unfettered deregulation is profound nonsense. Consider how much regulation and rules it takes to make football work. Otherwise the first player to bring a gun would win and it’s called war. In the body, unfettered growth is called cancer.
Of course there has to be some balance, because too much order and all growth is stifled and the organism dies. The opposite of cancer would be auto-immune disease. Somalia would be a place with too little order and North Korea a place with too much order.
Push the pendulum too far in either direction and either it just creates that much momentum in the other direction, or the whole system falls over and you start again.
Right now, the immediate problem is that we treat money as a commodity, rather than a contract and have manufactured far too many unpayable promises to each other, than can be kept and there is a big reality reset coming. As the various large organizational structures, from nations to corporations, to religious tribes and various other framing devices, go crashing into the earth’s furniture.
If one puts human civilization into a biological evolutionary frame, life on this planet is attempting to grow a world central nervous system, but we have yet to realize it has to function as a bottom up feedback network, rather than top down control. Not anywhere close yet.
Reply
UnlearningEcon says:
December 7, 2011 at 11:38 am
Just to note that this a great comment and should be read by everyone.
Reply
mansoor h. khan says:
December 8, 2011 at 8:49 am
UnlearningEcon,
I agree this is a great comment. It is so wonderful to see America discuss things of true importance rather than Football and Basketball only. I have been waiting for this “awakening” all my life.
The bottom-up central nervous system may be the internet itself (god willing). Now we just have to come to a “somewhat” of a consensus and then “fight” for change via the ballot box.
Mansoor H. Khan
Another Comment on NC:
http://www.nakedcapitalism.com/2011/12/philip-pilkington-libertarianism-and-the-leap-of-faith-%E2%80%93-the-origins-of-a-political-cult.html#comment-559142
Jim says:
December 7, 2011 at 3:36 pm
Here might be a few things to take into consideration when looking at Libertarian theory, Pilkington theory, Yves theory or my theory–from a metatheoretical angle.
As soon as theory(macrotheory or microtheory) strays from its preoccupation with and awarness of its own limits it devolves into ideology.
In order to proceed to a level of even provisional closure and to be able to theorize and explain a particular phenomenon, one must engender the illusion that all the returns are in.
Theorizing is largely negative, it consists of exposing limitations, rather than in clinching positive points.
What are considered so-called facts seem to constitute low-level theories.
There always seems to be a collusion of the descriptive and the normative.
Hayek, Pilkington, Yves or me or any of the commetariat tend to enjoy presenting our respective frameworks with an air of obectivity which tends to conceal a prior normative choice about the market or the state or the society.
Is the gap between words and things and events closed by acknowledging that there is an ineradicably normative dimension in every “descriptive” formulation?
What would be a model of political community built on the acceptance of openness(i.e. infinity) rather than closure?
Reply
PL_2 says:
December 8, 2011 at 12:04 am
Excellent.
Reply
mansoor h. khan says:
December 8, 2011 at 12:27 am
Jim said:
“What would be a model of political community built on the acceptance of openness(i.e. infinity) rather than closure?”
Just make sure it is closed enough that the rules are not so loose that we lose the “community” itself to something like “USURY” (otherwise known as bookkeeping Armageddon).
Mansoor H. Khan
Reply
Steve (the other Steve) says:
December 8, 2011 at 10:00 am
Well said. The subtext of all the commentary on this thread is that we presume the existence of an “objective function” we can all agree upon. I doubt this is true.
Reply
mansoor h. khan says:
December 8, 2011 at 11:23 am
Steve,
All do not have to agree. Just most have to agree.
Also, the objective function is always:
“let us have as much fun as possible but let us not drive drunk (i.e., lose our civilization).
mansoor h. khan
Reply
Another on NC:
http://www.nakedcapitalism.com/2011/12/dog-whistle-economics-code-words.html#comment-561203
MyLessThanPrimeBeef says:
December 8, 2011 at 3:17 pm
Zen – A special transmission outside the scriptures; No dependence upon words and letters.
Dao – The Dao that can be worded is not the eternal Dao (though we note here that Dao De Jing is something like 1,000 worlds long).
Me – words are very dangerous. Avoid them whenver possible. Try telepathy, Vulcan Mind Meld, body language, facial expressions, anything non-verbal. Above all, keep your writing short.
Reply
LeonovaBalletRusse says:
December 8, 2011 at 3:36 pm
As in, *we create our own reality*? Who needs words?
Reply
mansoor h. khan says:
December 8, 2011 at 6:55 pm
MyLessThanPrimeBeef,
Yes. but something is needed to communicate ideas.
So the story goes:
Buddha on one occasion (while standing in his normal place where he gave sermons from) simply lifted a “bouquet of flowers” (did not speak any words).
All the monks in attendance were confused except for Mahakasyapa (who smiled back at the buddha confirming that he had understood the idea). So (it is said) this is how ZEN branch of Buddhism started.
Most of the time Buddha used words (and probably body language to go with it) and sometimes “bouquet of flowers”.
also, he was known as the “silent sage”.
mansoor h. khan
P.S. My mother was born and lived until age 22 several hours driving distance from his place of death in Uttar Pradesh, India.
Reply
Comment on NC:
http://www.nakedcapitalism.com/2011/12/dog-whistle-economics-code-words.html#comment-561223
LeonovaBalletRusse says:
December 8, 2011 at 7:16 pm
mansoor, was your family influenced by Krishnamurti?
Reply
mansoor h. khan says:
December 8, 2011 at 7:26 pm
LeonovaBalletRusse,
Well since you asked. Here is the story handed down in my family:
Many generations ago (my mom does not know for sure how many) our ancestors were travelling to go the river ganges (a very sacred river in Hinduism) to perform holy rites and they met a devout muslim who asked them so where are you (my ancestors) going?
And they told him to perform their holy rites on the river ganges. The devout Muslim said to them: I can show you ganges right here. So he showed them gangs right then and there and the rest is history (at that moment my ancestors accepted Allah as lord of worlds).
Mansoor H. Khan
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