Monday, October 31, 2005

Bernanke - Bubble Perpetuator

A Bubble Perpetuator
By Doug Noland

To frame my analysis of Dr. Bernanke as Fed Chairman, I thought it worthwhile to highlight comments made yesterday by the highly respected Reserve Bank of New Zealand (RBNZ): “The Reserve Bank has increased the Official Cash Rate (OCR) by 25 basis points to 7.00 percent. Reserve Bank Governor Alan Bollard said: ‘As noted in our September Monetary Policy Statement, medium term inflation risks remain strong. Persistently buoyant housing activity and related consumption, higher oil prices and the risk of flow-through into inflation expectations, and a more expansionary fiscal policy are all of concern. While there has been a noticeable slowing in economic activity, and a particular weakening in the export sector, we have seen ongoing momentum in domestic demand and persistently tight capacity constraints. Hence, we remain concerned that inflation pressures are not abating sufficiently to achieve our medium term target, prompting us to raise the OCR today. The most serious risk to medium term inflation is the continuing strength of household spending, supported by a relentless housing market and rapid growth in mortgage lending. Significant dis-saving by the household sector is showing through in a worsening current account deficit, now 8 percent of GDP. Borrowers and lenders alike need to recognise that the current rate of debt accumulation is unsustainable. The correction of these imbalances and associated inflation pressures will require a slowdown in housing, credit growth and domestic spending. We also expect a significantly lower exchange rate. The longer these adjustments in behaviour and asset prices are deferred, the more disruptive they are likely to be. Today’s increase in the OCR, combined with higher world interest rates and pipeline effects from the repricing of fixed rate mortgages, are expected to slow the housing market and household spending over the coming months. However, the prospect of further tightening may only be ruled out once a noticeable moderation in housing and consumer spending is observed. Certainly, we see no prospect of an easing in the foreseeable future if inflation is to be kept within the 1 percent to 3 percent target range on average over the medium term.”

RBNZ Governor Alan Bollard is successfully filling the large shoes left by his predecessor - the legendary Dr. Donald Brash, in the process upholding the high esteem long afforded the Reserve Bank. Please note how their pronouncement leaves little doubt where the Reserve Bank stands or what key fundamental factors drive policy decisions. No obfuscation necessary: “The correction of these imbalances and associated inflation pressures will require a slowdown in housing, credit growth and domestic spending.” Policymaking becomes unduly complex only when central banking drifts from traditional central banking analysis and doctrine, as it has (and is about to take another giant step) in the U.S.

We will certainly not be reading RBNZ-like language from the Bernanke Federal Reserve. Dr. Bernanke comes at central banking from a completely different perspective and analytical framework (note: the issues of transparency and inflation targeting become moot when applied within the context of a flawed framework). And while there is some media banter with respect to the “dove” or “hawk” label, there is no question that Dr. Bernanke is An Impassioned Inflationist. As for fighting inflation: he’ll talk the talk – of course, and there will come a day when talk will not suffice. In the past, I have labeled chairman Greenspan both an Inflationist and monetary policy radical. Incredibly, Professor Bernanke takes these to a whole new, dangerous extreme.

I was very much hoping Donald Kohn would be Alan Greenspan’s replacement, but would have been satisfied with several potential candidates including Roger Ferguson and Larry Lindsey. And I can say with complete seriousness that of all the leading economists in the country, Mr. Bernanke would be my least favored pick. Is it mere coincidence that the candidate at the very bottom of my list is at the top of the Administration’s and Wall Street’s? Of course not.

I have no reason to doubt that Dr. Bernanke is a “kind and decent man,” as such described by our President. He conveys an aura of integrity, and he is clearly extremely intelligent and a very hard worker. He is said to be a nice guy, and I like nice guys. I very much respect all of these attributes. And I do sense that his instincts are to be a straight-shooter. The nature of his new position, however, will demand a change, and it appears this process is well underway. He has no chance of becoming the master obfuscator, like his predecessor, or attaining Greenspan's amazing capacity to dodge every tough question and “never take a punch.” Dr. Bernanke will provide an easy target. I am tempted to fault Dr. Bernanke for “being an academic,” although it is more clearly stated that I view his background as a distinct handicap for presiding over this New Age of Wall Street Market and Speculation-based Finance in what I expect to be an increasingly hostile environment.

Candidly, I am concerned that he is such an accomplished econometrician and theorist. He has decades invested in his models and analytical framework; he’s too intellectually, analytically and emotionally committed to a perspective of how the financial sector and economy work, one I don’t expect will serve him well. Not only will his talents and perspective bias his view of the uncertain world in which we live, it is my fear that an econometrician’s analytical framework leaves one today at a decided disadvantage in discerning and appreciating the nuances of contemporary Wall Street Finance.

From Steven Pearlstein of the Washington Post: “Bernanke is smart and will figure out the markets before long.” Well, I’m not sure it’s that easy. It’s not about “smarts” or even so much with his lack of market experience. I don’t believe career “marketicians” would be well-suited for economic research. Do econometricians have an analytical perspective conducive to “figuring out the markets”? I believe the Bernanke chairmanship is likely to illuminate the major divide that exists today between academic research and real world markets – a chasm not commonly recognized. (note: warning to academia – your research is being set up as The Fall Guy.)

I don’t believe there’s any hope for effectively modeling complex financial systems or markets. Greed, fear and speculative dynamics are not generally the favored elements of the econometrician. Furthermore, it is my view that models don’t offer much value (negative value?) when it comes to the underlying complexities, subtleties, and whims of Credit expansion, financial flows, speculative dynamics and asset inflation/Bubbles. The model-maker must work to radically simplify a perplexing, convoluted and changing world. For example, instead of the nebulous and difficult to quantify “Credit,” there will be a modelers bias toward the more easily quantified parameter – such as (narrow) money supply. Cause and effect will be, conveniently, in the eye of the beholder.

Dr. Bernanke and I actually have something in common. As he wrote in his book – Essays on The Great Depression, a compilation of his papers on the subject – “I guess I am a Great Depression buff, the way some people are Civil War buffs.” But while my studies and analytical framework lead me to focus on the excesses and distortions of the Roaring Twenties – in particular the commanding effect that speculative liquidity came to possess on the asset markets and, consequently, on the nature of spending, investing and financial claims creation/intermediation – Professor Bernanke’s preoccupation is with supposed policy errors committed by the Fed commencing (late in the game) in late-1928. Apparently, he has little problem with the boom. My view is that the unsound U.S. boom ensured a commensurate bust. Sure, there were post-boom mistakes that worsened the outcome. Yet policy confusion and error should be recognized as an integral and unavoidable aspect of the late-boom and post-Bubble environment, and why the best cure for a Bubble is to ensure it doesn’t develop to begin with (as Dr. Richebacher informs us). “Mopping up” should absolutely never evolve into a concerted strategy, but recognized only as a last resort “long-shot.”

And I have my own theory as to Professor Bernanke’s stunning meteoric rise to prominence. As a disciple of Milton Friedman and as one of the leading academics in the field of post-Bubble reflationary monetary policies, he was a natural selection for the Fed when nominated in late-2001. It was the Greenspan Fed’s view that the U.S. economy had entered a post-Bubble environment, and there were some real advantages associated with procuring the esteemed academic research and analytical firepower to dignify their plan for less-than-admirable inflationary policies.

I will conjecture that if the markets had responded negatively to the new Fed governor’s open discussion of “helicopter money,” “government printing presses,” “pegging the 10-year Treasury yield,” “unconventional measures,” and the “global savings glut,” well, he would have been sent packing back to Princeton and the seasoned central banker Donald Kohn (nominated as Fed Governor with Bernanke) would be slated as our next Chairman. But an anxious Wall Street was quickly smitten with the temerity of “Helicopter Ben” and what he represented for the extreme direction of Federal Reserve policies. If there was ever an “all’s clear” message signaled directly and unmistakably from one of our leading policymakers to the markets, it was given in late 2002 by Dr. Bernanke. Go out and speculate in junk bonds; better cover your short positions in Ford bonds and Credit default swaps; buy stocks and CDOs; aggressively accumulate emerging market debt and equities; load up on commodities, get out of “money” instruments and grab any risk asset available (while you have a chance!). What ensued was one of the greatest redistributions of wealth in history.

Not quite as barefaced, Dr. Bernanke’s long-time emphasis on fighting deflationary risk by inflating the “money supply,” lent strong support to a vulnerable Wall Street “structured finance” apparatus. Recall that in 2002 the corporate debt crisis was at risk of jumping the firewall to the household sector (Household Finance, Ford Credit, etc.), with the potential to engulf the burgeoning ABS marketplace. Wall Street investment bankers working closely with their “financial engineers” had become prominent producers of contemporary U.S. “money” stock. So Dr. Bernanke’s long obsession with remedial “money” supply inflation ensured that he was both a proponent for and potentially powerful asset of Wall Street Finance. When Governor Bernanke made assurances that the Fed would do absolutely anything and everything to avoid “deflation,” Wall Street rightfully understood that Fed inflationary policies were in the process of expunging what had been a looming risk of systemic debt collapse. The sophisticated leveraged speculators were immediately emboldened; bankers were emboldened; investors were emboldened; and Wall Street “structured finance” was really emboldened (outstanding ABS has since doubled). At that point, seemingly no degree of Credit or speculative excess was too much, not with Professor Bernanke and the determined Greenspan Fed ready and more than willing to experiment with “mopping up” strategies.

There is one overriding fundamental issue I have with this whole amazing development: the view that we had fallen into a post-Bubble environment was flawed from the get-go. The technology Bubble had burst, but it was only an offshoot of the much greater Credit Bubble that was very much still Bubbling. Rather than combating deflationary forces and stabilizing some (fictitious) general price level, aggressive inflationary policies were instead poised to most intensely inflate markets already demonstrating the strongest inflationary biases (i.e. real estate, Treasuries, agencies, MBS and asset markets generally). Rather than buttressing an impaired post-Bubble Credit system, reflation stoked the Stalwart Mortgage Finance Bubble to unimaginable excess (and power). Instead of inflationary policies working to “stabilize” financial and economic conditions as the dauntless monetary theorist would ascertain, the resulting unprecedented Credit and speculative excesses guaranteed Precarious Monetary Disorder and Myriad Unwieldy Bubbles Both at Home and Abroad.

I will admit to being sympathetic to the theoretical premises supporting post-Bubble monetary stimulus. As we have witnessed, however, such policies will invariably be used prematurely – in the process acting to bolster boom-time dysfunctional Monetary Processes, resulting in only progressively precarious asset/speculative Bubbles, financial fragility and economic maladjustment. And, as we are also living these days, the greater and more precarious the Bubble(s), the more likely seductive notions of benevolent inflation will resonate throughout the entire system. To be an Eager Implementer of Reflationary Programs – an especially natural bias for someone of Dr. Bernanke’s intellectual perspective – virtually guarantees worldly mutation to Closet Bubble Perpetuator. They go (Un-Invisible) Hand in hand. The only hope against such an unfavorable outcome would be a keen understanding and appreciation for the dynamics of Credit and speculative excess, as well some regard for a “Mises” view of economic mal-adjustment. I have seen no indication suggesting that such mitigating factors will be at play for Dr. Bernanke.

What our system desperately needs right now is some Reserve Bank of New Zealand determination to rein in excess – pure and simple. I would be shocked to see such an approach from the new Fed Chairman. He holds special disdain for “Bubble Poppers,” and faults the post-Benjamin Strong Fed for the Great Depression. (“…it is now rather widely accepted that Federal Reserve policy turned contractionary in 1928, in an attempt to curb stock market speculation.”) At Milton Friedman’s ninetieth birthday party, he stated, “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we [the Fed] did it. We’re very sorry. But thanks to you, we won’t do it again.” These days, he continues to downplay the risk of inflation. And from Nell Henderson’s Wednesday article in the Washington Post: “Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week…. U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke… But these increases, he said, ‘largely reflect strong economic fundamentals,’ such as strong growth in jobs, incomes and the number of new households.”

Take and hour or so and carefully read his April 2005 speech, “The Global Savings Glut and the U.S. Current Account Deficit.” I can honestly say – with a conscious effort to avoid hyperbole – that it is one of the most flawed and suspect pieces of analysis I have ever read from a respected economist. And the subject matter is one of the most pressing issues that must be confronted by our policymakers. It actually does seem like he is oblivious to the fact that our intractable Current Account Deficit is foremost a reflection of unrelenting Credit excess, inflated asset prices, over-consumption and economic distortions. He is similarly oblivious to the reality that this “global savings glut,” being accumulating by our trading partners, is largely IOU’s we created in the process of mortgage and asset-based borrowings. Yet, this line of reasoning is consistent with his analytical framework. From the preface of his book: “I believe that there is now overwhelming evidence that the main factor depressing aggregate demand [during the Great Depression] was a worldwide contraction in world money supplies. This monetary collapse was itself the result of poorly managed and technically flawed international monetary system (the gold standard, as reconstituted after World War I).” Dr. Bernanke has a troubling (Friedman-like)) penchant for looking outside the U.S. Credit apparatus, financial system and markets when it comes to identifying the true source of instability.

And from his 1995 article, The Macroeconomics of the Great Depression: A Comparative Approach: “To understand The Great Depression is the Holy Grail of macroeconomics… We do not yet have our hands on the Grail by any means, but during the past fifteen years or so substantial progress toward the goal of understanding the Depression has been made… To my mind…the most significant recent development has been a change in the focus of Depression research, from a traditional emphasis on events in the United States to a more comparative approach that examines the experiences of many countries simultaneously.”

And from his March 2004 speech, Money, Gold, and the Great Depression: “Some important lessons emerge from the story. One lesson is that ideas are critical. The gold standard orthodoxy, the adherence of some Federal Reserve policymakers to the liquidationist thesis, and the incorrect view that low nominal interest rates necessarily signaled monetary ease, all led policymakers astray, with disastrous consequences. We should not underestimate the need for careful research and analysis in guiding policy. Another lesson is that central banks and other governmental agencies have an important responsibility to maintain financial stability. The banking crises of the 1930s, both in the United States and abroad, were a significant source of output declines, both through their effects on money supplies and on credit supplies. Finally, perhaps the most important lesson of all is that price stability should be a key objective of monetary policy. By allowing persistent declines in the money supply and in the price level, the Federal Reserve of the late 1920s and 1930s greatly destabilized the U.S. economy and, through the workings of the gold standard, the economies of many other nations as well.”

I do agree with the notion that “ideas are critical.” Unfortunately, our new Fed chief has some very flawed and dangerous ideas of how to deal with critical events that could very well develop early in his term. He should be talking restraint and the risks associated with attempting a “soft-landing.” But he and his fellow Inflationists will have none of that. And while the stock market has already demonstrated its stamp of approval, the bond market and dollar could not quite shield their grimaces. There remains this dogged hope that a housing cool-down will damp inflationary pressures – allowing Dr. Bernanke to cut rates early next year. At this point, I wouldn’t bet that a moderation in mortgage Credit growth will significantly alter the inflationary backdrop. Inflationary pressures are becoming only increasingly pronounced and oblivious to little baby-step rate increases. The system beckons for an actual tightening of financial conditions, a development certainly not accomplished by a little restraint employed at the fringe of mortgage lending excesses.

And, if I had to place a bet, I would wager that the more folks (certainly including our foreign creditors) delve into Dr. Bernanke, the more the bond and currency markets will question his credibility. And a novice Fed Chairman with credibility issues is not – I would hope – going to quickly reverse course and stimulate. Where’s the “continuity” in that? And whether he does or does not, we’ve not heard the last growl from the Dollar Bear. I do not envy Dr. Bernanke. He attained the pinnacle of success he has always dreamed. His chairmanship is quite likely going to be a nightmare. The wrong man - and his deeply flawed analytical framework - at the wrong time. How could it be? A Bubble Perpetuator.

Sunday, October 16, 2005

A Modern Dilema - Fiat Money

I would suggest reading all these recent posts, about fiat money and the currency problem. The knowledge is here - we need to circle the wagons, and truly solve our serious problems - quickly!

"The Great Dollar Standard Era is a direct result of the removal of gold as the underpinning of the world's currencies. The vast overprinting of currency will inevitably debase the value of the U.S. dollar and, because so many foreign currencies are pegged to the dollar, the currency of those nations as well. Fiat money, simply put, is created out of nothing. A future promise to pay has never supported monetary value for long and the United States is so overextended today that it is doubtful it could ever honor its overall real debts." ...

Artificial Allocation of Resources Is Unsustainable

"Artificial allocation of resources is unsustainable" - Another important consciousness tormentor!

Deflation's Revenge On Illusory Wealth

This one's important! - A speculated strong dollar collapse?

...When the workout teams tote up assets and liabilities, the post-mortem will show that America’s economic engine had been running on fumes for years and that most of our supposed wealth was merely a credit-induced mirage. Hard to believe? Then ponder this: Derivative debt instruments currently in play total $248 trillion, according to the most recent figures from the Bank of International Settlements. This compares with a global economy in real goods and services amounting to a little less than $40 trillion. It’s not a case of the tail wagging the dog, but of the tail wagging an entire financial cosmos...

...Even before these factors emerged, however, Buffett, Soros and a few other Masters of the Universe were shorting the dollar in size. But as the chart makes clear, they have all been on the wrong side of the trade – not because their logic was terribly flawed, but because they failed to understand that it is financial speculation that has been driving the dollar, not the relatively puny dynamics of the world’s goods-and-services economy. Despite being in prodigious oversupply, the dollar is strengthening simply because it’s where all the leveraged action is. Who cares about the perfect storm. Leveraging dollars is still where it’s at -- the hottest game in a global casino that, even with an earthquake rumbling beneath it, remains eager and able to extend hundreds of trillions in credit to the players...

Signals of the End of the Dollar Standard

Signals of the End of the Dollar Standard

....I was never an advocate of any form of gold standard, unlike the current Fed Chairman, now ironically testing the fiat money system to destruction.

However, in recent years the scales have fallen from my eyes. As Voltaire said in 1729 “paper money eventually goes down to its intrinsic value – zero.” Every fiat paper currency before or since has confirmed to this prediction. A fiat paper currency that is also the global reserve currency becomes this problem writ large. A US Treasury official of old - Sam Cross - put it this way: “if you postulate a system that depends on one country always following the right policies, you will find that sooner or later no such country exists. The system is eventually going to break down”. In my view the Dollar Standard system is irretrievably breaking down, as signaled by four recent developments described below: ....

The Dollar’s Problems Haven’t Gone Away

Good-By to Marshall Auerback- and good luck.

...As net foreign debt balloons, the size of any future adjustment grows apace. One is invariably driven to the conclusion that at some point, as an addition or alternative to crude protectionism, exchange controls will be necessary in order to manage the rising tide of private sector dollar sales that grow ever larger, swamping the ability of even the largest economies such as Japan to absorb them. This would indeed be ironic as the American government has waged an increasingly aggressive stance against countries which have not fully liberalized their own capital accounts. One wonders whether the anticipation of this eventuality would trigger huge capital flight a la Asia in 1997/98. Less noticed, but equally apparent is that informal controls already exist in certain realms of the American economy (the difficulties created by both regulatory and tax authorities in the purchases and holding of physical gold is but one small instance of this; even the much-vaunted ESF has unresolved tax issues which have yet to be resolved definitively by the IRS and the SEC).

Ultimately, it would not surprise us to see various restrictions imposed in regard to the holding of foreign currencies and gold. As recently as the early 1970s, Arthur Burns, then Fed Chairman, railed against the “unsound practice” of Americans having foreign currency bank accounts. This notion may seem far-fetched in today’s high-tech financial world, but the story of the US, particularly post-9/11, has been a steady erosion of economic and political freedoms. As virtually every encroachment on personal liberty in the US these days is rationalized on the grounds that it constitutes a necessary measure in support of the “war on terror”, we have little doubt that any such future restrictions would likewise be justified in this manner....

Globalization Or...?

Globalization Or...?

Tuesday, October 04, 2005

A Unified Balance of Law Systems Is The Imperative of Global Solutions

L.A.Gillespie - Link
{My goal - Write an international constitution to create a law and money standard based on the fundamental laws of nature.}
"You must think big ideas to advance." L.G.
"The fundamental law of the law is the constitution, and the fundamental laws of the constitution are the fundamental laws of nature, science and logic - or mind and person." L.G.

I have had a breakthrough, and discovered a new path, to scientific natural law logic. I have discovered scientific logic systems that can and will change the world. I have discovered scientific logic systems large enough to destroy or save the world. I have discovered how to create scientific moral logic systems of newly discovered natural law. I have discovered a scientific logic system superior to the "existing." Using the cognitive intellectual logical faculty, and adhering to absolute equilibriated objectivism... Scientific logic systems can be built from the fundamental natural laws to solve the world's problems. I can show you how to use scientific natural law's moral equilibrium logic to best Boolean, machine logic and the "existing" natural law logic. I tore the whole system apart, and put it back together with the scientific natural laws. I can prove beyond any reasonable doubt, that the separation of commercial powers and state powers is required, to safely advance all nations, by new scientific natural law logic systems. A superior scientific natural law argument can be based on philanthropy, entropy and equilibrium. The scientific natural laws can be used as a logic system proof, of John Nash's equilibriums, superiority over Adam Smith's supply and demand, and David Ricardo's comparative advantage natural laws. In other words, a democratic scientific logic system can be built to best the "existing" natural law, and state law logic systems... In order to advance civilization, scientific logic requires, the separation of state financial powers, and commercial financial powers.

"To develop the skill of correct thinking is in the first place to learn what you have to disregard. In order to go on, you have to know what to leave out; this is the essence of effective thinking." Kurt Godel

A U.S. Constitution Completeness - The U.S. Constitution requires a XXVIII'th amendment, to solve America's and the rest of the world's problems. This amendment is necessary because of the incompleteness of the existing U.S. Constitution. The present state of capitalism and U.S. Constitutional law can be proven mathematically incomplete, by natural equilibrium law, first discovered by John Nash, around 1950. A completed constitution is one where the greatest good is best served by the highest equilibrium possibe, of new constitutional laws. This certainly is not now the case. The natural law of equilibrium is the highest of all the natural laws, thus should be respected so... Only your deepest soul sees the world truly, and the above can be clearly seen by any honest person. The incompleteness of human understanding can only be enhanced toward completeness by truly realizing America needs a 28'th amendment based on the natural law of absolute equilibrium.

The natural law of philanthropic equilibrium can produce superior systems of universal economic justice. The power of the above's natural law ideas, creates law with teeth, as ideas connected to the natural laws have real teeth and true power. You see, the rudimentary problem is the U.S. Constitution's incompleteness, from our founding fathers on. Both Jefferson and Franklin offered completeness solutions, in their day, but these ideas did not make it into the original document - They should have. Franklin's works offer an international bank to manage the offshore tax havens, and Jefferson's works offered the 11'th amendment against monopolies. Many throughout history have offered these same solutions, from Plato to Keynes and our own Paul Davidson, but they have not been instituted, as they should have been. Isn't it about time?

The natural law of equilibrium demands an evolution of the U.S. Constitution. Natural equilibrium law demands a separation of powers to balance the U.S. Constitution in a perfect universal competition of markets, to create a true universal justice. The completeness of the separation of powers for the U.S. Constitution can be accomplished by simply creating and adding a 28'th amendment. The incompleteness of the separation of powers in the U.S. Constitution is glaringly obvious, when its is simply pointed out, and historical knowledge teaches us that natural equilibrium law works best under the widest separation of powers possible. We need a higher equilibriating U.S. Constitution, beyond Godel's constitutional incompleteness.

Remember, liberty is equilibrium, and absolute liberty is absolute equilibrium! The ideal is the absolute equilibrium of your law structures, and the problem only exists because there is no rudimentary natural law thinking. The natural laws grant the only way out of the semi-entropic systems. The higher ideas and natural laws of philanthropy and equilibrium are the only ideas and laws to best the lower ideas and natural laws of supply and demand, comparative advantage, and free trade. The fundamental house of naturally equilibriated laws, will be, and is, our only true savior. The rights of liberty, justice, and equality is a natural law of absolute equilibrium - The scales of true justice - The balance of all! The highest spirit of the law is the highest natural equilibrium - possible!

Is capitalism balanced? No! Let's write the sliding time scale law structure to balance it into an ideal and scientific universal justice! The #1 fundamental natural law of universal justice - Divide supply and demand into a multi-directional supply and demand, or, put money in competition with money, globally, and scientific universal justice can be achieved! It all comes down to, "If we set up government, all government, in business in competition with existing private commercial business, we can unilaterally make unlimited reasonable use of the printing press."

A Completeness Theorem - A tautology of universal completeness - Due to scientifically accepted facts of the incompletenesses of all present knowledge and logic systems, and the fact that we have never learned to talk the absolute truth, this self-logical proof is deemed necessary - The scientific universal truth, knowledge and wisdom of man, excluding the completenesses of cosmic balances, laws and truths, does not and can not exist in the incompletenesses of the past's and present's injustices. The scientific universal truth, knowledge and wisdom of man, excluding the completenesses of cosmic balances, laws and truths, can exist only in the future's ideal state of scientific universal justice, grounded in natural law. Tis a logical imperative, due to the past's and present's incompletenesses, that absolute true truth, knowledge and wisdom must be drawn from a perfected state future universal wisdom, truth and scientific logic, of the ideal universal completenesses! The incompleteness within the completeness, turned to the ideal state of scientific completeness, is the only absolute truth, and is based on the completeness of the fundamental natural laws in a true relationship to man's state laws, and fundamental scientific self-certainty, also based on the fundamental natural law of balance! The universal laws are completenesses within themselves. Properly used, they are the scientific proofs of themselves, and all universal reality! These natural fundamental laws are a self-logical proof, in and of themselves, of a natural spirit origin, due to the circular fact of logic itself, grounded in the very essence of our own spirit nature! Thus, the #1 law of absolute truths is - Absolute truths can only be drawn from the fundamental natural laws - the only truly grounded reality!

The law of scientific cognitive self-logic - The essence of righteous self-judgment over judgment is the king of the self! The soul is the only source of such righteous self-judgment, thus the intuitive soul exists! The lightening fast laws of mind are governed by the positive energy soul, the only possible answer, as all other energies are yin yang combos, and man can't think that fast! Thus, man is created with a mind and soul smarter than he is! This is the competition between intuitive trickster energy and soul energy. There are also three free wills - subtle soul will, subtle trickster will and our spirit's stronger will. This is the law of scientific self-logic, beyond man's ability to know its total self-functioning! The reverse engineering of logic and judgment shown in the natural laws is proof of a logical spirit producing the essences of logic and judgment in the first place! A discovery of the miraculous! The natural law of righteous self-judgment of judgment is the supreme conceptual law of man's nature! It's signature is our natural soul!
L.A.Gillespie - Link