The Global Financial Crises' Placebo Effects...

The Global Financial Crises' Placebo Effects
by Satyajit Das

(Also see: When Money Becomes Worthless by Martin Hutchinson)

Mixed metaphors
Botanical commentators are finding "green shoots." The astronomically minded have seen "glimmers." The meteorologically minded have spoken about the storms "abating." Strong rallies in equity and debt markets have confirmed the recovery for the "true believers." The Global Financial Crisis (GFC) crisis is over!

It is useful to remember Winston Churchill's observation after the British expeditionary force's escape from Dunkirk: "[Britain] must be very careful not to assign to this deliverance the attributes of a victory.'' There may be confusion between "stabilization'' and "recovery.''

The green-shoots theory is based on a slowdown in the rate of decline in key economic indicators, improvements in the financial system, unprecedented government support for the banking system, near-zero interest rates and large fiscal stimulus packages. The recovery of emerging markets, especially China, also underpins hopes of a swift return to growth.

Receiving the messengers
The puzzling thing is that real economy indicators continue to be poor.

GDP forecasts for 2009 have steadily deteriorated, with world growth expected to be negative 2% to 3%, with especially poor prospects for Japan and the euro zone. Industrial output, employment, consumption, investment and global trade continue to be weak. Even China, which expected to grow between 6% and 8% in 2009, experienced a fall in exports of over 20% over the last year.

The wealth effects of the GFC on economic activity are unclear. In the United States alone, $30 trillion of value has been destroyed. Pension funds have lost anywhere between 20% and 50% of their value. Combined with declines in housing prices and reduced dividends and investment income, the sharp decline in wealth may not be yet to fully flow through into consumption.

The financial system has stabilized but not returned to the "rude good health" that current executive compensation demands within banks would suggest.

Good results for Goldman Sachs and J.P.Morgan are offset by less impressive performances by Bank of America, CitiGroup and Morgan Stanley. Profitability is patchy and reliant on risky trading income and large underwriting revenues from capital raisings by financial institutions and companies who are de-leveraging aggressively. Asset quality remains vulnerable to more bad debts from the normal recessionary credit cycle that is working through the economy.

Bank risk levels have increased to and in some cases beyond pre-crisis levels. Goldman Sachs second-quarter earnings showed an increase in risk levels as measured by Value-at-Risk (VAR). The increase in risk is probably understated as it takes into account diversification benefits that may be overstated under conditions of market stress. It is probably also understated because of assumption of trading liquidity that may be optimistic given recent experience. The higher levels of risk-taking reflect increasing comfort in central bank support of financial institutions' liquidity and their ability and willingness to intervene to limit price risks. Leverage and lending against risky assets has resumed at a rate not seen since 2007.

Capital remains scarce and bank balance sheets are at best not growing and at worst shrinking. Some estimates suggest that the bank capital shortfall could be in range of $1 trillion to $2 trillion, equivalent to a credit contraction of around 20% to 30% from previous levels. Proposed bank regulations, primarily the increased levels of capital and lower permitted leverage, will also affect the ability of the financial system to extend credit.

The link between debt and economic growth is well established. The global economy probably needs around $4 to $5 of debt to create $1 of GDP growth.

International Monetary Fund researchers Tamin Bayoumi and Ola Melander, in a study of the economic impacts of an adverse shock to bank capital ("Credit Matters: Empirical Evidence on U.S. Macro-Financial Linkages," IMF Working Paper 08/169) found that in the United States, a one percentage point fall in Tier 1 risk-weighted capital ratios reduces real GDP by 1.5%. This means that global bank capital shortage may restrain credit creation thereby reducing economic activity and sustainable growth levels.

The impact of fiscal stimulus packages has been variable. In some jurisdictions, the payments have been saved or applied towards debt reduction rather than consumption. Targeted measures, such as the cash-for-clunkers' deals (cleverly packaged as ‘green' environmental initiatives) have boosted immediate demand for cars, but the long-term demand effects are unclear.

The multiplier effect of the fiscal initiatives is likely to be low. Major infrastructure initiatives will take time to implement. Few projects are "shovel ready." The rate of return on government spending programs, some of which are politically motivated, is unclear. Government spending increasing capacity is likely to create problems in a world where many industries are operating with surplus capacity. Government bailout packages for various industries, such as the auto and housing industries, however well intentioned, are delaying much needed capacity adjustments and risk prolonging the problems.

The phoenix-like recovery in emerging markets is primarily driven by panicked government spending and loose monetary policies increasing available credit. Estimates suggest that around 6% of China's growth of around 8% is attributable to government spending and increased bank lending.

The extraordinary increase in lending in China is fueling unsustainable growth. In the first half of 2009, new loans totaled more than $1 trillion. This compares to total loans for all of 2008 of around $600 billion. Current lending is running at around three times 2008 levels and at a staggering 25% of China's GDP. The combination of government spending and bank loans has resulted in sharp increases in fixed asset investments (up 30% from 2008). Government incentives, in the form of rebates for purchases of high value durables such as cars and white goods, have also increased consumption (up 15% from 2008). Even Chinese government officials have admitted that the recovery is "unbalanced."

The increase in industrial production in the absence of real end demand for products could result in a rapid inventory buildup. The availability of credit is also fueling rampant speculation in stocks, property and commodities. Estimates suggest that around 20% to 30% of new bank lending is finding it way into the stock market, in part driving up values.

The price rise in emerging market shares, debt and currencies also reflects a blind belief that anywhere must be safer and more promising than the U.S., Japan or Europe. This misses the point that these markets have a strong trading and export orientation or are external capital dependent. While some have bright long-term futures, they will need to make difficult and slow adjustments to their growth models to return to trend growth.

The recovery in emerging markets has, in turn, underpinned the recovery in commodity prices and economies dependent on natural resources. A significant part of this is inventory restocking but there is a speculative element. Availability of abundant and low-cost bank financing, combined with a deep-seated fear of the long-term prospects of U.S. Treasury bonds and the dollar, has encouraged speculative stockpiling of certain commodities, artificially boosting demand.

In reality, the global economy has, in all probability, entered a period of stability after a fairly big decline. Market sentiment seems to be shaped less by facts than the Doors' song: "I've been down for so long, it feels like up to me."

Government largesse
A key risk remains the ability of governments to finance their burgeoning government deficits. A wretched combination of declining tax revenues, increased government spending to cushion the economy from recession and bailout packages for banks and other "worthies" means that many countries face large and continuing budget deficits.

In August, the U.S. Congressional Budget Office released forecast that project the 10-year deficit to reach over $9 trillion, some $2 trillion more than it had estimated as recently as March 2009. Even countries with relatively healthy balance sheets such as Australia do not anticipate balancing their books for many years. If the problems of an aging population and unfunded liabilities such as public sector pensions, health-care and social security arrangements are included, then the budgetary position looks considerably worse.

In 2009, total sovereign debt issues are expected to total more than $5 trillion, of which the United States alone will need to finance around $3 trillion. The increases in sovereign debt issuance are astonishing – U.S. around 300%, U.K. over 400%, euro zone around 50%. Government debt-to-GDP ratios for many developed countries are projected to reach and remain at levels in excess of 100%.

Overall government deficits in major economies through the recession are estimated to total around $10 trillion (around 27% of GDP of these economies). The work of economists Kenneth Rogoff and Carmen Reinhart on previous recessions suggests that the deficit estimates are conservative and the amount that will need to be financed will be between $15 trillion (40% of GDP) and $33 trillion (86% of GDP).

As a comparison, the total amount of global investment assets under management, according to one estimate, is around $120 trillion. This provides some idea of the funding task ahead.

Long-term interest rates have risen sharply, reflecting supply pressures. The 30-year U.S. Treasury yield has increased by around 1.50 percentage points since the start of 2009. Maturities also have shortened, increasing the refinancing challenges ahead. Participation of central banks in the U.S. and U.K. bond markets, under their quantitative-easing mandates, has hold down interest-rate increases, creating a somewhat artificial market.

A key issue over the coming months is the continued demand for increased sovereign debt issues. China, Japan and Europe historically have been major buyers of U.S. Treasury bonds. As their own fiscal position changes and their current account surplus shrinks, the ability of these investors to absorb the increased supply is unclear. China's foreign exchange reserves are growing more slowly than before. China has continued to purchase U.S. Treasury bonds, but some purchases represent a switch from U.S. agency paper. As the United States has increased its issuance program, China's purchases are now a smaller portion of the total.

In the best case, the government debt issuance is accommodated but squeezes out other borrowers. In the worst case, governments find themselves unable to finance their deficits setting off a new stage of the GFC.

Withdrawal method
Given the size of the intervention, a key question is the timing of withdrawal of government support for the economy.

The current apparent health of the financial system owes everything to wide-ranging government support. The ability of the banks to raise equity and debt is substantially underwritten by the "too-big-to-fail" doctrine. Profitability is supported by low and, in some cases, zero cost of deposits and a sharply upward sloping yield curve that creates significant earnings from borrowing short and lending long. Withdrawal of support may expose deep-seated and unresolved problems in the financial system.

Substantial quantities of structured securities are now held by central banks either as collateral for funding arrangements or through other innovative market support mechanisms. This has substantially increased the size of central bank balance sheets in the U.S., U.K and Europe.

It is not clear how and when these "temporary" positions will be unwound. Attempts to create structures for repackaging these securities, such as the frequently touted but still to be implemented Public Private Investment Partnership (PPIP) program, have enjoyed limited success. Untimely attempts by governments to liquidate these portfolios may be disruptive to fragile markets.

These securities may have to be held to maturity (sometimes over 10 years in the case of some Asset Backed Securities (ABS) and allowed to self liquidate from the underlying cash flows. The bloated central bank balance sheets may restrict policy flexibility significantly.

Government spending has been substituted for private consumption and investment. The deficits will ultimately necessitate a combination of increased taxation and reduced spending to correct this position.

Assume a country has government debt equal to 100% of its GDP. Assuming an annual interest rate of 5% and a GDP growth rate of 4%, a 1% budget surplus is required to maintain debt at current levels. If the gap between interest rates and growth is greater, then the size of the required surplus is commensurately larger. In effect, it is unlikely that the present expansionary fiscal position can be sustained over a long period. The fiscal position of major economies may restrain growth.

Fundamental truths
Belief in the recovery story and sharp financial market rallies fail to recognize that little has actually changed since the GFC began. Fundamental failures have not been fully addressed.

The required reduction in debt levels has not been completed. Increases in government debt have substantially offset reductions in private sector debt.

Instead of dealing with the problem of leverage, the debt has also merely been rolled forward through a variety of clever warehousing structures and the manipulation of accounting rules.

In a system that has excessive leverage, there are only two adjustment mechanisms. The value of assets supporting the debt and income available to service the borrowing can be increased, usually by inflation. The value of the debt can be reduced through writing it down to the real value of the assets.

Governments and central banks have gambled on inflation despite its social and economic costs. In reality, inflationary pressures in the global economy are not apparent. The rebound in energy and food costs has prevented deflation. The absence of demand, excess capacity, reduced credit creation and low velocity of money circulation may mean that it is disinflation or deflation that is the problem going forward.

There is now faith-based reliance on governments' ability to rescue the economy. Intervention has helped stabilize economic activity and the financial system but it improbable that government actions alone can prevent the necessary adjustment in debt levels and growth rates.

Government's share of most developed economies is around 25% to 40% of GDP. Its role in liberal democracies is limited by the fact that is fundamentally an intermediary, not dissimilar to a bank. It derives its resources through taxation from certain sectors of the economy and redirects it to other sectors. This means that its ability to control an economy has limits in the absence of nationalization of all productive activity.

In the short run, governments can borrow or print money to augment its resources. Like all debt, it borrows from tomorrow to pay for today. Quantitative easing (the now respectable name for printing money) also has limits, unless governments are willing to risk hyper-inflation and the social dissolution of the Weimar Republic or Zimbabwe. While governments can influence an economy, they cannot completely reverse inevitable adjustments dictated by market forces.

Governments may also be impeding necessary adjustments. Rising government investment is increasing capacity in a world with stagnant demand and over-capacity in many sectors.

China's current growth is being driven by government investment that is increasing capacity, which in the absence of sufficient domestic demand may be directed to exports increasing the global supply glut. Politically and socially motivated bailouts of national champions and strategic industries mean the necessary reductions in capacity through bankruptcy and corporate failure have not been allowed to happen.

There are even signs that the financial sector is rediscovering old habits. The government and taxpayer paid for return to profitability of major financial institutions, and the return of remuneration levels to pre-crisis levels raises fundamental questions about whether any change has occurred. After the strong second-quarter earnings report for Goldman Sachs, Chief Financial Officer David Viniar told Bloomberg News that, "Our model really never changed, we've said very consistently that our business model remained the same." Despite the egregious excesses, governments seem collectively to lack the will to reform the financial system to avoid the problems of the past.

In 2007, when the U.S. housing bubble collapsed, the satirical magazine The Onion demanded that the American people be given another bubble to speculate in. Their wish now appears to have granted. Actions to stabilize the global economy seem only to have created new bubbles – in government debt and emerging markets. Government actions seem to be primarily designed to ensuring continuation of the Ponzi scheme. The only lesson learned is that no Ponzi scheme can ever be allowed to stop.

As states one familiar but anonymous saying: "Never in the history of the world has there been a situation so bad that the government can't make it worse."

Global questions
There is broad agreement that a key component of the GFC was the problem of global capital imbalances. A central feature was debt-funded consumption in the United States that allowed 5% of the global population to constitute 25% of its GDP, 15% of consumption and 48% of global current account deficit. Japan, China, Germany and the other savers funded the consumption. At its peak, the United States was absorbing about 85% of total global capital flows to fund its government and private debt.

Any lasting solution to the GFC requires this imbalance to be dealt with. The glib solution requires the United States to save more and consume less, and the savers to save less and consume more. The problems in implementing the solution are considerable.

Timothy Geithner's recent discussion with Chinese officials, to assure his hosts of the safety of their investments in dollars and U.S. Treasury bonds, reveals the dilemma. On the one hand, America needs the Chinese to continue and increase their purchase of U.S. government debt to finance its fiscal stimulus and bailouts. On the other hand, America needs China to cut the size of its current account surplus, boost government spending, encourage personal consumption and reduce savings. All this should also occur ideally without any major decline in the value of the dollar or U.S.
Treasury bonds or the need for China to liberalize it currency and open its capital account, allowing internationalization of the Renminbi!

A cursory look at the respective economies highlights the magnitude of the task. Consumption's contribution to U.S. GDP is 71%, while in China, it is 37%. Given that the GDP of China is around $4 trillion to $5 trillion, vs. $15 trillion for the United States, and average income in China is around 10% to 15% of U.S. earnings, the difficulty of using Chinese consumption to drive the global economy becomes apparent.

Additionally, over the last 25 years, Chinese consumption has declined from around 50% to current levels of 37%. During that same period, Chinese savings have risen and exports have been the engine for growth. Given that a significant portion of exports is driven ultimately by American buyer, lower U.S. growth and declining consumption creates significant challenges for China.

Dealing with these global imbalances has not been a high priority in the various summits, symposiums and talk-fests that global leaders have shuttled to and from. The focus has been ‘NATO' – no action talk only. Half-hearted and unworkable proposals, such as the use of the synthetic Special Drawing Rights as reserve currency, have emerged.

Globally unbalanced
Reliance on Chinese foreign currency reserves is probably misplaced. Chinese reserves, a large proportion denominated in dollars, may have limited value. They cannot be effectively liquidated or mobilized without massive losses. Increasingly strident Chinese rhetoric about the safety of their dollar assets reflects increasing panic.

In reality, China is trying desperately to switch its reserves into real assets – commodity or resource producers where foreign countries will allow. In the meantime, China continues to purchase more dollars and U.S. Treasury bond to preserve the value of existing holdings in a surreal logic. On the other side, the U.S. continues to seek to preserve the status of the dollar as the sole reserve currency in order to enable itself to finance itself. The intractable nature of this problem is evident in the frequently contradictory statements from various Chinese spokesmen regarding the official position on the dollar.

No sustainable global recovery is likely without addressing the fundamental global imbalances that lie at the heart of the GFC.

Placebo Effects
Wolfgang Münchau, writing in the Financial Times on June 14, 2009, eloquently summed up developments. "Instead of solving the problems to generate a recovery, the political strategies have consisted of waiting for a recovery to solve the problem. The Europeans are relying on the Americans to generate growth. The Americans are relying on the Chinese, who in turn are waiting for the rest of the world."

The placebo effect is a pervasive phenomenon in medicine. A sham medical intervention may cause the patient to believe that the treatment will change his or her condition sometime causing the actual condition to improve. Conditioning, expectations and motivation all can play a role in placebo effect.

In recent times, investors, markets and governments have all come to believe in the recovery, sometimes by selective interpretation of facts to support the conclusion that they need. As T.S. Eliot observed: "Mankind cannot take too much reality."

Given reluctance or inability to deal with the real problems, it is not entirely clear whether the GFC cures are real or inert treatments. It is also not clear whether current improvements in market and economic conditions are sustainable or merely a short-term placebo effect.

Satyajit Das is a risk consultant and author of "Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives" (2006, FT-Prentice Hall).

A Mathematically Pragmatic Universal Constitution…

Motto of the elite: “Placate the sovereign individual with complex words' systems, to keep him docile”.

SB asked this question in his last post to me:

“Will we allow it to be ? education into the human condition if sprinkled lightly over all people can make it s(o: - any ideas on how to bypass the politicians, bankers and lawyers who don't like people talkin', getting ideas ...?"

"Politicians enriched for lawyers - words with zero information content when wielded by these dangerously erratic people."

…and yes, I do have many ideas on how to bypass the politicians, bankers and lawyers who don’t like people talkin’, getting ideas, against the wishes of politicians being enriched by/for lawyers, by words with zero information content, when wielded by these dangerously erratic people__The answer is a bit of truth, for the first time in history…

Throw away Aristotle, W.James and J.Dewey, they are fools. Pick up on all the early and late pragmatic Pythagorean Greeks, and Ibn Sina, Kant, Peirce, Veblen and J.M.Keynes, the intelligent mathematical pragmatists. Re-found all your thinking on this new principle: The Mathematical Theorem of Genericity: "Mathematical genericity is absolutely required to sensibly understand reality, simply...", and its clearer explanation: "Truth is eternally limited to genericity, due to the fact that the manifold of interpretation is infinitely extendable__X/X=1+IEE, eternally..." These general facts just make it an easier standpoint, to see the greater Universal/eclectic picture. Then maybe we’ll have a shot at enlightening the world to the fallacies of all nations’ Imperial Preference Constitutions, which are no more than Elite Documents to enhance theft by the well-off and powerful, while their handmaiden_The Academic Elites_create word systems to placate the sovereign individuals out of their natural rights, and into docility, poverty, crime and wars.

We used to have simple intelligence when we knew grounded mathematical truths could rule the massive over-inadequate word systems. Now, we have a complexity to inanity, leaving nothing and nobody in charge, but money and the evil power pinhead-elites. The sovereign individual must pick up his God-given innate talents, for recognizing new mathematical truths, and help in the great anti-intellectual battle that needs waging. It’s a simple mathematical method of truth, based on the old Greek Golden Ratios’ maths of least and most squares and powers. It quickly and easily shows everyone the two truths’ systems the Rich and powerful have erected over the millennia__The powerful one for themselves, and the weak one for the less well-off sovereign individuals.

The sovereign individual was weakened by the promise of equal rights for all, when in fact all constitutions simply guarantee rights according to the skills of theft, and you’ll all find these Imperial Preference clauses in the constitutions of all nations on Earth__These anti-innocuous laws must be changed, to laws closer satisfying the rights of all sovereign individuals, not just the wealthy few. The battle is nothing more than the sovereign individuals rights, and/verses, the corporate/government theives’ rights. It’s completely your choice to fight the intellectual battle for your own sovereign rights__Please choose correctly.

The Two Rights Systems are no more than stupid verses intelligent pragmatism. The stupid system uses complexities of all kinds, to blind all weak parties into docility. The innate intelligent system uses the sensible middle way mathematics of old, and awakens the juices of possibilities for the weak to intellectually over-throw the powerful__"Yes We Can". The faulty democracies of ‘Crooks and Criminals’ must be replaced with democracies of Total Sovereign Individual Rights of Truly and Fairly Incentivized Equality and Pure Liberty, for the first time in world history. The constitutions of pure sovereign theft must be swapped, at the nearest yard sale, for what the elite years ago threw away, as junk thought, because it slightly invaded their absolute rights of pure theft. And the greatest criminal in the long march of word-smithing was one darling lil’ ol’ Aristotle, creating the most elaborate phony logic system, the world has ever witnessed, yet most have been too ill prepared to find the simple mathematical truths of history, to over-come this madman of rhetorical solipsism. That time of sovereign individual blindness, is now ending__Good riddance to the ignorance of Aristotle and his ilk…

And, it’s time for all willing bodies to help end the World’s love affair of: “Equal Rights According and Accorded to the Skills of Theft”…

p.s.
Where we are now: Link
Where we can go: Link

Analytic Eclecticism__A Scientific Probability Method...

"“Eclecticism” is a name given to a group of ancient philosophers who, from the existing philosophical beliefs, tried to select the doctrines that seemed to them most reasonable, and out of these constructed a new system (see Diogenes Laertius, 21). The name was first generally used in the first century BCE. Stoicism and Epicureanism had made the search for pure truth subordinate to the attainment of practical virtue and happiness. Skepticism had denied that pure truth was possible to discover. Eclecticism sought to reach by selection the highest possible degree of probability, in the despair of attaining to what is absolutely true. In Greek philosophy, the best known Eclectics were the Stoics Panaetius (150 BCE.) and Posidonius (75 BCE.). The New Academic, Carnaedes (155 BCE.), and Philo of Larissa (75 BCE.). Among the Romans, Cicero, whose cast of mind made him always doubtful and uncertain of his own attitude, was thoroughly eclectic, uniting the Peripatetic, Stoic, and New Academic doctrines, and seeking the probable (illud probabile). The same general line was followed by Varro, and in the next century the Stoic Seneca propounded a philosophical system largely based on eclecticism." Author unknown

A note just to let everybody know the method of thought, I'm most often using...

The False Utopias of Scientific Logic & God Logic, As Now Percieved…

Can any one of us truly answer the question: “How does one know the boundary line between logic and ego?” Is it even possible to discern? What is the exact criteria you use to determine whether you are using a logic faithful to your chosen field of belief? How do you even make your ideas truly clear to yourself? What are your methods? Do you even believe there are any truly value-valid methods? Is mathematics a sound method, and do you use math? Is empiricism a sound method? Is fallibility and doubt to be thoroughly investigated in developing one’s logic? Are experiments logically valid, and how does one draw conclusions from experiments? Is faith a satisfactory method for some, and what is its true ground or grounds of thought? Is science a satisfactory method for others, and what is its true ground or grounds of thought? Is logic scientifically valid, as now constructed, or as is used in a folk(natural) usage? How does ego know logic as logic, and not ego? How does logic know ego as ego, and not logic? As per all the new and extended logics, of the centuries, what makes logic sound and valid…?

False & True Philosophical Utopias...

(Anyone wishing to follow these dabates as they take place: cleck here)(click image for larger view)

“Two things here are all-important to assure oneself of and to remember. The first is that a person is not absolutely an individual. His thoughts are what he is "saying to himself," that is, is saying to that other self that is just coming into life in the flow of time. When one reasons, it is that critical self that one is trying to persuade; and all thought whatsoever is a sign, and is mostly of the nature of language. The second thing to remember is that the man's circle of society (however widely or narrowly this phrase may be understood), is a sort of loosely compacted person, in some respects of higher rank than the person of an individual organism." C.S. Peirce

The above quote is the central premises of explanation of my graphic, in my first post this month. If one studies the depth of Peirce’s statements related to my graphic, the truths are represented by the three center circles, which can actually be the three conceptual/perceptual and non-perceptual selves, as one fades, one is present ‘I’/being, and the third is the self “coming into life in the flow of time”. The reason I’ve chosen conflexivity is I didn’t feel the present terms actually covered all the actions taking place in our mental processes. Others have chosen the words, ‘Abduction’, ‘Reflexivity’ and ‘Reflexive Control’, but it’s more than a mere reflexive system__The deepest mind states are a truly conflexive process. By conflexivity, I mean, as an analogy, say an epiphany, which is a split second lucid vision into the super-consciousness of one’s own mind, or as some would believe, into the super-consciousness of all minds or even a universal mind. The reason I choose ‘con-’ is it has the meaning, when added to ‘flexivity’, of being two or many processes in one, especially as relates to a small split second’s epiphany, having the massive power of vision to reveal such a large amount of information, it’s often over-whelming to retrieve at that moment. It may take years or even decades to understand the entire meaning of such epiphanies, as I’m sure many of you have experienced, and for this reason and the explanation’s complexity, I’ve chosen the word conflexivity. If one looks up ‘con’ in the online etymology dictionary at; http://www.etymonline.com/index.php?search=con&searchmode=none one will quickly see the utility of the many meanings, which suits my purpose well, as I intend, over the next 6 months, to relay an entire system of philosophy, by a method I’ll later explain. For now, it’ll be from a universal standpoint of eclectic genericity. By using a general method, it allows me to take in all the breadth of universal facts and beliefs, and at the same time allows a perspective of the depths of particular facts and individual beliefs, desires, habits and ambitions…

So as not to become bogged down in constant extreme debates between others varied views and ideas, and my own, I’ll be responding with general impersonal expositions of my ideas, as loosely relates to others’ ideas. My methods have their main foundations in the early Jains, Nyaya, Heraclitus, Pythagoras, Socrates, Plato, Euclid, Eudoxus, Nicomachus, Archimedes, Apollonius, A.Biruni, Avicenna/Ibn Sina, A.Magnus, F.Bacon, Boole, De Morgan, W.Clifford, A.Schopenhauer, C.S.Peirce, T.Veblen, W.Durant and L.Kolakowski. The three I’m most impressed with are Ibn Sina, C.S.Peirce and L.Kolakowski, as all three offer eclectic universal genericity perspectives. Both Ibn Sina and C.S.Peirce offered complete philosophical systems, including all views of human thought, i.e., Logic, Physics, Metaphysics, Spiritism and complete category systems to boot. These two are the only ones who offered all of human thought in one person, and respected all aspects of these diverse mentalities of history, therefore I have a great deal of respect for them, especially as offering a great helping hand to unite the many dis-united schools of thought, mentalities and ideas of our present ‘crazy’ world.

As to the ‘False & True Philosophical Utopias’, this will be an ongoing discussion about “The Mentalities of Histories” as Kolakowski has named them. This ‘mentalities’ has far greater conceptual representational power than say, ‘The History of Ideas’, ‘The Intellectual History of Eras’ or ‘The History of Concepts’, as ‘The History of Mentalities’ can represent anything from the smallest personal individual in depth idea, to the largest universal open conceptual ideas of the planet’s evolutional mental state, as expressed by people such as P.T de Chardin, E.Schrodinger, D.Bohm and even J.Lovelock. I intend to discuss most all the false utopias of leftists and rightists, i.e., Marxism, socialism, communism, the Heinz 57 totalitarianisms, the Heinz 57 capitalisms and anything else that comes up as relates to social philosophy, social justice and a possible evolution to a true state of pure liberty, based on the complete ‘Inversity’ of present state law system understandings, through full explanations of what ‘Inverse Greed’ truly consists of. This may sound like a tall order, but I assure you I have simplified the process greatly over the last two years, by graphing, tabling and charting these processes and methods with an analogical/visual representation that’ll become obvious as we progress. I’ve named my entire philosophical system ‘Aneology’, which means ‘One Visual Logic…’

Not to make this post any longer, I’ll end here for now…

P.S.
The Q, C, and X, as represented above stand for Q = quantum states(though all 3 are quantum change states), C = biological cells, and X = foreign exchange markets, as so emplaced. These letters can be replaced to represent all central actions of brain/mind states, or other states of complexity of the nations' systems and world systems, where complexities yet unsolved exist. In other words I could have the letters, M = minds, P = photons, and C = concepts, etc., etc. Just as in all algebras, the letters are interchangable as per the topics of discussions proceed. As per the drawing's box informations, they are all chiralling cycloid motions of photons, as photons are the family of bosons, which allow super-positioning/cloning, etc., as per Einstein, which allows concepts to merge from lesser states to greater vision states, then fade to emplaced memory states. Future diagrams and explanations of the mechanics will form the entire picture of a working brain/mind model and possible and necessary probable world mechanics of...

The reason foreign exchange is included is it represents one of the largest areas of incomplete complexity(and many others will be shown in future posts), similar or symmetrical, information wise, as that of deep brain/mind mechanics of hypotheses formations, and possibly a clearer method of future explanations, since any internal mind states, not completely understood, can more easily be represented by symmetrical relationships of external real world states(I'm drawing the symmetries of actions from E.Noether and her statements of physical states in relation to the symmetries of the laws of physics and nature, and the required conditions of her theorems_She's one of our most important global resources of unifying thought). Just as morality can not be agreed to internally(the epistemic dilemma of 'free will and responsibility'), other than our individual prejudices learned by age 18, as per Nietzsche, this same internal moral state can be understood through its symmetrical external relationship of the desires, ambitions and habits of entire communities' esthetic liberty actions, as represented by the real world accomplishments we see around us, which actually exists by the original moral desires and ambitions of individual choices, and this way morality is actually externally/objectively, scientifically measurable_over time. As an example, we all enjoy living in comfortable houses, as per living in cold, damp caves_that's a moral/happiness personal choice we all make. Though some may not see it as a moral choice, one only has to think about the more compassionate condition of wife and children's comfort of house compared to cave, then one sees the moral/happiness implications. This will also be given through future graphs, tables and graphics, with their related explanations, and showing how to measure not only morality, but a closing of many of philosophy's epistemic and ontological gaps...

Hope that helps...

And as per logic of, logic simply tells us the true and false condition states of our reasoning, and no more, i.e., reason asks/contemplates the questions/doubts, and logic answers the condition states of... Of course, many conflate logic states with Aristotle's syllogistic 3 laws of logic__I use Ibn Sina's, Boole's, Lobachevsky's, Grassmann's, De Morgan's, Clifford's, Peirce's and Vasiliev's much extended logics, over Aristotle's less extensive reasonings...

The Blind ‘Black Box’__Ergodicity...

Sandia National Laboratories Peircean Induction Graphic
John Pollock __ The Mystery Link _ Embodied Perception
Bourdieu’s Three Relations of Knowledge Claims
The Economic Mind of Charles Sanders Peirce, by James R. Wible
Complete Economics, Physics, Philosophy Image Library...
What's A Trillion Dollars Look Like...?

History has many blind spots, but none so great as exists in political economic science, or the author should say, the non-science of political economics. Let it be stated right from the start; ‘methodological individualism’, or ‘rational choice theory’ fails to scientifically produce any viable logical syllogistic conclusions, due to the facts not existing in epistemic individualism(the individual must look out, as well as in, for the total truth)__unless the whole is also considered in the initial premises. This theory has a long history of claiming more than is even possible of an epistemic agent of rational choices, and due to more than any other factor, of ignoring ‘irrational choice theory’, ‘uncertainty’ and the many mathematical statistical unknowns of and in the social sciences domain, especially as logically relates to the greater aggregates of outside influences(which simultaneously exist) of other and most often opposing nations of epistemic and ontological competitors, as whole states and aggregates of greater magnitude states, of actions upon not only one’s own ontic nation’s facts, but every epistemic individual agent’s facts as well. In logic theories of the above, the greater aggregates of outside states rational and irrational epistemic and ontic actions, can obviously over-whelm any epistemic rational choice actions of the primary state, as she is simply mathematically outnumbered and out-powered by said ontic actions and outside epistemic intelligences. (Continued...)

The Logic of Self, Creating Self, Within The Greater Self…

Epistemology, Rationality, and Cognition, by J. Pollock
VISION, KNOWLEDGE,AND THE MYSTERY LINK, by John L. Pollock & Iris Ovid

"Two things here are all-important to assure oneself of and to remember. The first is that a person is not absolutely an individual. His thoughts are what he is "saying to himself," that is, is saying to that other self that is just coming into life in the flow of time. When one reasons, it is that critical self that one is trying to persuade; and all thought whatsoever is a sign, and is mostly of the nature of language. The second thing to remember is that the man's circle of society (however widely or narrowly this phrase may be understood), is a sort of loosely compacted person, in some respects of higher rank than the person of an individual organism." C.S. Peirce

"Truth is that concordance of an abstract statement with the ideal limit towards which endless investigation would tend to bring scientific belief, which concordance the abstract statement may possess by virtue of the confession of its inaccuracy and one-sidedness, and this confession is an essential ingredient of truth."CSP

Everyone has traveled the tumultuous emotional and intellectual path of life, in search of the great ‘Riddle of the Sphinx’__few have succeeded__most are still searching__many have given up. This author is no exception, yet having traveled a longer and more varied journey than most, may have stumbled across the great secret of homunculus. Philosophers and intellectuals of all ages have trekked the shores of this knowledge and wisdom, of self and others, in search of the magical metaphysical and logical keys to the universe__the philosopher’s stone, as it’s been called__but where does it hide? Have you looked directly before your very eyes…? There’s a space there you may not have realized__It’s called ‘Habitus’. It’s a tricky space, not small, not large, but humongous in size, compared to all the other possible thoughts, excepting infinity, that is. Many have named this space, but few have truly investigated its depths of clear waters. This area, of the logical metaphysics of habits, will be thoroughly investigated, to reveal a truth system so simple and obvious, one will be amazed they hadn’t thought of it themselves...

Some 2300 years ago Aristotle, in his metaphysics and ethics, delved into the continuum of mind and thought, but not as deep as he could have, had he recognized the importance of his retroductions’ full possibilities. Socrates and Plato had earlier also investigated the same area, but interpreted the continuum into forms, ideals, ideas and archetypes, which most investigators falsely took to be a synthetic transcendentalism, when in fact it was actually one of the closest attempts of pure explication. Had Aristotle looked deeper into his aesthetic rationalism creating the highest virtuous states of mind, and instead of laying it off to ‘god’, he may have discovered the truth to his deeper investigations of the metaphysics of rational habits. About two millennia later, Kant also came very close with his metaphysics of law, liberty and morality, to discovering the full actions of mind, but concentrated too heavily on the synthetic and moral aspects instead of the aesthetics and esthetics of habits. And finally, Peirce developed the metaphysics of habits as fully as anyone to date, except possibly Bakhtin, Bourdieu and Lefebvre. Though many of history’s greatest minds have investigated the depths of mind and thought, none have yet closed the epistemic, teleological and ontological gaps between feelings and actions, completely. This author is stating, this can and will be done…

One of the most important figures to mention is a little known Russian logician, Nicolai A. Vasiliev, due to these statements;

Logic is based, according to Vasiliev, on geometrical intuition. The basic logical relation, as in geometry, is the relationship between whole and the parts of the whole, reduced to the relation between foundation and its consequences. Foundation is a whole and consequences are its parts. This relation in essence should be assessed as mathematical and it lies at the basis of the syllogistic principle. Logic and mathematics enrich each other. That is why "non-Aristotelian logic is not merely an application to logic of non-Euclidian geometry method; we may argue that non-Euclidian geometry is a special case of the application of the non-Aristotelian method of logic."

“The pseudosphere is in some sense an ideal construction, but under certain physical conditions in the universe, Lobachevsky's imaginary geometry becomes the geometry of real space. "If the world or our sensory faculties are organized in a particular manner, logic must be non-Aristotelian" [Vasiliev 1912a, 238, reprinted 1989, 85]. “Our world and sensory faculties are arranged in such a manner that all immediate sensations are positive. "Negative" sensations actually are negative; they are secondary if compared to positive sensations, and appear when one feature replaces another one that is incompatible with the first one. In a world in which living beings have two kinds of sensations, non-Aristotelian logic surely reigns. To put it another way, the logical laws and principles are determined in the first place by nature of cognitive objects and of the experiences open to the subject, i.e. they are EMPIRICAL”. N.A.Vasiliev

This allows one to see that a non-Aristotlean logic is necessary for modern understanding to take place, just as a non-Euclidian geometry is. It further reinforces the facts already known by many about C.S. Peirce’s non-Aristotlean logics, as all these figures thus far mentioned, except Aristotle, used and or advocated a triadic logic, or polyadic, over the dyadic logics of others, as is shown in Vasiliev’s above quotes… Continued...

One Lucid Diamond...

(Early preview of Paul Davidson's new book; 'The Keynes Solution, The Path To Global Economic Prosperity')
(New) Global Financial Crisis__Placebo Effects, by Satyajit Das
(New, Aug. 15) Lunch with the FT: Larry Summers, By Chrystia Freeland

America’s seminal economist, Dr. Paul Davidson, has written the clearest vision of money and math mechanics, to date. Not since the 18th century’s true mathematical logicians, De Morgan, Jevons, Clifford, Peirce and Veblen, have scientific ideas of logic, money and math mechanics been laid so clearly before our eyes. Mr. Davidson begins with a simple explanation of a true scientific method, any high school student can easily understand, then exposes the fallacies in relation to and of the classical economists’ and mathematicians’ mistakes, of economic model mis-applications and mis-interpretations of. He reveals his entire thesis in a simple dialectic method any gifted 5th grade student could understand, by keeping the technicalities to his other 22 published books, and some 200 articles. Never before, in the history of economics, has so much been revealed by such a simple, yet scientific, method.

As an example, Mr. Davidson, shows how the ‘universal’ facts, habits and ambitions of money, control the ‘particular’ events of all economic history. He does this by revealing Keynes’ true vision of how all nations’ balance of payments’ imbalances and hoarding, actually starves the world of its productive employment potential. This is truly where all macro-economic theses should start, yet sadly almost all other classical macro-economists see not the forest for the trees. It’s taken America’s yet unrecognized genius, Paul Davidson, to point this very fact out. He further exposes this first and foremost generating problem, creating the other unrecognized problems’ mechanics with and in ‘the ergodic theory’, ‘the neutrality of money theory’, ‘comparative advantage theory’, ‘free-trade theory’, ‘efficient market theory’, ‘the incompatibility theory of mobile money and full employment’, and all really generated from the fundamental ‘balance of payments’ imbalances and hoarding theory and facts’, just as Keynes originally stated and implied them, in his total works, published and unpublished, private and governmental letters, etc.

After clearly and succinctly showing the relationships between true Keynesian theories and facts, against classical mis-interpretations of the same theories and facts, Davidson easily explains his extended Keynesian solution, to the world’s present problems. This is done through his recognition of the world’s need for not only a new ‘re-regulation of financial markets and trade’, but also his, as it was Keynes’, call for a new ‘international financial architecture’, to rebalance the world’s prices, money and currency contracts. Davidson has updated Keynes’ ideas to a 21st century feasible plan of fundamental economic and highly possible political actions, the world sorely needs.

Never before has an economic book impressed me as much as this little treatise, as I see it having the potential of reaching not only the academic economists, but most all political, academic and intellectual elites, along with many private citizens. This is what the nation and world really and truly needs__a clear and concise manual to explain and solve the world’s massive problems. Davidson has succeeded as no other in accomplishing this job…

L.A.Gillespie
…autodidactic, polymathic economist, logician, etc…

The Great Mathematical Instincts__P=NP

The Keynes Solution, The Path To Golbal Economic Prosperity, by Paul Davidson
IS “MATHEMATICAL SCIENCE” AN OXYMORON WHEN USED TO DESCRIBE ECONOMICS? by Paul Davidson
The Great Mathematical Instincts__P=NP

"Two things here are all-important to assure oneself of and to remember. The first is that a person is not absolutely an individual. His thoughts are what he is "saying to himself," that is, is saying to that other self that is just coming into life in the flow of time. When one reasons, it is that critical self that one is trying to persuade; and all thought whatsoever is a sign, and is mostly of the nature of language. The second thing to remember is that the man's circle of society (however widely or narrowly this phrase may be understood), is a sort of loosely compacted person, in some respects of higher rank than the person of an individual organism." (5.423)2 C.S.P. Continue...

Equilibrium /|\ Efficiency /|\ Ergodicity...

Tell me, what do you think it’s going to take to reach the ‘Washington Consensus’, etc., crowd about the realities of the Equilibrium, Ergodic and EMT Theory fallacies?

(NEW TRUTH) The Great American Bubble Machine, by Matt Taibbi

ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY, by Paul Davidson

Thanks to Mr. Davidson the world may still have a chance to awaken from its long classical economics slumber. It's truly a shame that the information to right the world's wrongs has existed since Plato, yet the world chooses to listen to defunct ideological classical, orthodox conflation mongers, instead of a sound mathematical economist like Paul Davidson. He started his career as a mathematical chemist, so he certainly understands better the real world mathematics underlying our economic problems.

I've often asked why the world can't understand the simple concepts of 'equilibrium', 'efficiency' and 'ergodicity' maths. It seems that when philosophers, physicists and economists take hold of these simple mathematical ideas, they thoroughly conflate their true meanings to a complete inversity of the realities involved. It's truly time for de-conflation.

Davidson and many others have been trying to right this capsized boat for many years, with little understanding from the mainstream communities, of the seriousness of the issues involved. It's really not to difficult to study mathematical history to uncover the truths of what Mr. Davidson speaks, compared to what the "Washington Consensus" herd bleats out. We need more minds of the soundness of Paul Davidson...

Equilibrium /|\ Efficiency /|\ Ergodicity
/|\ = Logic symbol for 'not same, yet related'
"Truth tends toward itself, til it tends away". My quote for true ergodicity.
_____________________________________________________________________
The Triadic Maxim___Any Idea; “Arithmetically check all possible effects, against all possible premeses, and the combined results will be the total actions of the idea.” me

Risk of Major Social Upheaval Likely if Bank Bonanza Continues...

(NEW) ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY, by Paul Davidson

(NEW) CHIPS is shrinking more than in its history. Half year numbers...

A little economic and financial truth by my favorite economist, Marshall Auerback...(full article here)

...Obama, Geithner, and Summers misguided...

...My issue with Obama and his fiscal package is the same as Rob Johnson's: taxpayer money is being deployed in hugely inefficient ways like Citi, BofA, AIG, and GM and discrediting fiscal policy in the process. Contrast this with the achievements of the New Deal. As Adam Cohen in his new book, 'Nothing to Fear'.

"[WPA] workers constructed or repaired more than 125,000 buildings, including 83,000 schools; 800 aiports; 950 sewage plants; and 650,000 miles of roads. They built or improved 78,000 bridges and 25,000 playgrounds; terraced 271,000 acres of eroded land; and taught two million people to read. They also ran a famous Federal Art Project, which hired destitute artists to create murals for public buildings, posters, and paintings. The WPA produced a highly regarded series of state guidebooks and an acclaimed collection of interviews with former slaves, and it played a major role in building the San Antonio Zoo, New York City's LaGuardia and Washington's Reagan airports, and the presidential retreat at Camp David. In 1965, on the program's thirtieth anniversary, The New York Times quoted a dispossessed North Carolina tenant farmer living in an abandoned gas station, who had been rescued by a WPA job. 'I'm proud of our United States, and everyting I hear The Star Spangled Banner I feel a lump in my throat,' he said. 'There ain't no other nation in the world that would have had the sense enough to think of WPA."...

Ponzi Prosperity – Built-to-Fail Economic Models...

(NEW) Excellent pbs 4hr. free video of 'The Ascent of Money', by Niall Ferguson

Satyajit Das has done an excellent job of describing the 'Global Financial Crisis' in this brilliant article. I highly recommend reading it HERE.

To Fareed Zakaria at CNN___The World’s Last One-Hundred Years, Most Important Event

I'm republishing this post of June 23, 2008, as I feel it's so important to be thoroughly understood:

(New June 29) The World Finance Crisis & the American Mission, By Robert Skidelsky

To Fareed Zakaria at CNN___The World’s Last One-Hundred Years, Most Important Event

Hi Fareed, thanks for the program, it’s great___Keep up the fine work… As to your question; “What’s the world’s last one-hundred years, most important event?” That, transactions’ mathematically factually, would definitely be Nixon’s `71 and `73 decisions to end the gold std. and the Bretton Woods system, and replace them with the longest era of currency tariff manipulations of nations’ trading systems, the world has ever known___Almost all the world’s excess off-shoring, excess arbitraging, hedging and speculation, is controlled by this one famous inane, freely-floating exchange’s, decision era. This has evolved into the system of extreme currency tariffs and subsidies, of between 400% and 800% actual ppp(actual purchasing price parity, and not the false purchasing power parity) exchange rate differences, between the developed world and the under-developed world, especially when Japan’s over-valued, and the BRIC’s(Brazil, Russia, India, China), and satellites, under-valued currency tariffs and subsidies are considered, at the extremes. The extreme economic senility, of trillions of dollars, of capitalist system costs added, by this “Kabuki Shadow Banking” mafia-capitalism’s imbalanced system, hasn’t been seen since China and Japan, some 600 and 400 years ago had such imbalanced currency systems’ standards, with China at 10 to 1, and Japan at 6 to 1, silver to gold ratios, when the West was at 14.5/15 to 1. History clearly records the devastating results of these collapses, when just semi-free, yet vastly imbalanced currency systems’, trade was first, large scale, tried, between the East and West. It wasn’t pretty…

Extremely imbalanced currencies, ARE, Extremely High Trade Tariffs, and opposite direction Trade Subsidies…!

The world can handle 10% and 20% imbalanced currencies. It can not handle 400% to 800% true PPP Currency Imbalances. The Derivatives $596(now $592, down from a high of $684) trillion markets(now fast expanding, notional transactions turnover trading value, per year___BIS numbers) simply put far too much financial pressure on Capitalism’s Aggregate System Operations’ Costs, as is now being clearly witnessed in our financial markets…

Unless we take down the extreme global currency tariffs and subsidies systems, by instituting a new “International Financial Architecture” re-balancing system, of sliding time scaled, self-balancing laws, capitalism is mathematically transactions guaranteed, to fully collapse, with all the system and currency raiding, taking place, by none other than Nixon’s, originating and now fully grown, Corporate Currency Raiding Mafia-Economists & Co... The show continues…

Dr. Paul Einzig’s complete works, some 65 books, verify the above facts, along with hundreds of other historical financial economists’ books and facts …

It’s time for America to awake…

Lloyd Gillespie
(a polymath, autodidact economist)

p.s.
As you'll have noticed, I wrote this warning before the Sept. collapse...

A Universal Philosophy of Pure Liberty, Natural Money, Aesthetic Ecology, and Value Validity Proofs of Peirce’s Pragmaticism and Abduction…

(NEW) Krugman's Nostalgianomics, by Brink Lindsey I agree more with Paul Krugman than Brink, but this paper offers many facts, otherwise...

“CHARLES SANDERS PEIRCE” by Josiah Royce, with W. Fergus Kernan

(Note)Extremely clear and concise ideas and graphs’ explications presented. (Exact Logic = Numbers = Analogical Graphs = A Universal Analogical Language of Genericity = Possibility of A Perceptual Wisdom of Analogical Pragmaticism)

“The upshot of the first phase of the proof(pragmaticism) is that logical goodness is goodness of inference and goodness of inference, which is validity, is to be understood as conformity to an ultimate end. This advances the proof because Peirce is interested in the nature of belief or assent insofar as it is voluntary. Voluntary belief is belief that is subject to the check of logical criticism through the criticism of inference. Since inference is a purposive activity which controls belief, belief in general must have a purpose. A reasonable conjecture, which Peirce makes, is that the nature of belief can be uncovered by finding out its purpose [36] and that its purpose can be understood by investigating the aim of reasoning in general.” Jeremiah McCarthy

Many following this blog may ask, “Why is he tying so much philosophy and physics in with his economics?” That’s a reasonable question and here’s the answer. Twenty-five years ago, I discovered an entirely new economic model possibility, for our ailing world. After several years of relaying my ideas, I came to realize I possessed no real(exact logic) mathematical proofs for my system, so I started searching, but where was I going to look, as I knew the world’s mathematics systems were so corrupted? Thinking it over, I decided physics may offer the best shot, because I could see the graphical models of their maths, but this proved a dead end as well, just as economic maths had, earlier. Then I decided to return to my much earlier studies of philosophy, as I knew they contained the largest library of laws and mathematical ideas’ histories. Since I knew I couldn’t find the information elsewhere, I started re-stumbling through the past’s greatest and not-so-greatest philosophers. Continue...

Are we citizens? Or peasants?

(New)The Greatest Swindle Ever Sold By Andy Kroll
"Can Future Systemic Financial Risk Be Quantified? Ergodic Vs. Nonergodic Stochastic Processes" by Paul Davidson

Fabius Maximus | May 21, 2009 This financial crisis has revealed much about America. About the operation of our government. About our ruling elites, and what they consider important — and who they believe should pay for their mistakes. And about the American public. Our passivity and ignorance (don’t know, don’t care).

If we choose to be sheep the best we can hope to get is a shepard. More likely we will get wolves. This is the natural order of things, and neither shepards or wolves are criminals. The most common reaction to these hard facts has been to whine about it. Perhaps instead we should consider not being sheep.

Some prominent conservatives analyze the situation

Perhaps the most astonishing aspect of the crisis has been that of prominent conservatives. As we see in this conclave talking on the Glenn Beck Program: “Destined to Repeat“, Fox News, 10 April 2009 — Red emphasis added. Excerpt:

GLENN BECK, HOST: There are undeniable parallels between what has happened in the past on our planet and what is going on today. And tonight, we’re going to cover a lot of them. I hope that you come away from tonight’s program with a deeper understanding of how some of the most infamous events in history started with the best of intentions. …

BECK: All right. Our country is not being controlled by jackbooted fascists. But like I said, during George W. Bush’s term, the groundwork is continuously being laid to take us there if the train goes off the tracks. History shows us that it only takes two simple things for fascism to rear its ugly head, and it can happen virtually overnight: fear and hunger. A temporary crisis is almost always a precursor to a much, much more permanent one.

So, with that in mind, let me show you the four main things that we’re going to be talking about tonight. First, we’re going to take you to Russia, where under communists like Lenin and Stalin, their revolution pitted peasants against the rich, the poor against the wealthy. They were basically saying, “Eat the rich! They did this to you! Get them! Kill them!”

These days, the comparison, demonstrators are rioting in front of the G20, unions protesting in front of AIG, an organized mob, buses showing up at the houses of the evil AIG executives. It’s a different style, but the sentiments are exactly the same — find ‘em, get ‘em, kill ‘em! They did this to you!

…

RGELLATELY, AUTHOR, “LENIN, STALIN & HITLER”: Well, the Russian Revolution came at the end of disastrous First World War, and the people were hungry and there was a great desire to get out of the war. Lenin came back to Russia — brought there by the Germans, incidentally — to try to bring about a revolution, and he did it cunningly by offering poor peasants land, people bread, and the army peace. And with those three slogans, he managed to obtain rather quickly and easily victory for the Bolshevik Revolution in October — old style, October 1917.

Now, what happened after that, of course, is that there was a war was in the countryside and basically he promised the land to the poor peasants, who were then invited to take land from the churches, from nobility that were better off. And what they did, of course, was think actually that the communists were going to let them keep the land. So, they became firm backers of the Russian Revolution, the poor peasants believing that now the land that they thought was rightly theirs for so long now was theirs finally to keep.

But of course, that was complete illusion, and within no time at all, the situation went from bad to worse. So, think what would happen if you draw off the best farmers, you kill off the best farmers — what do you think is going to happen next? What happens next is a famine.

BECK: And that’s exactly what happened. And I see this parallel with AIG and then the bankers and everything else — hate them, hate them, they did this to you, you’ve got to get them, you know, kill them off, put them in jail, take their money, whatever. Who is going to run these things? There are — they have expertise that most don’t.

Let me — let me go to Amity. Do you have any or anybody — is anybody watching the news today and seeing things that don’t have to repeat? But when you, as a historian, and you know history, don’t you look at today and go — wait, wait, wait? Everybody knows what we’re doing, right? Everyone is aware this is dangerous territory that we’re — that we’re walking down.

AMITY SHLAES, AUTHOR, “THE FORGOTTEN MAN”: Yes, Glenn, there is a variant of what you said before — politicians who can’t remember the past condemn the rest of us to repeat it. So, you get the feeling in Washington, they haven’t thought about what government can do before. I prefer to call it “statism,” the ever-expanding state what we’re talking about, which then corrupts, when then sometimes leads to war. And yes, I see, when we look at companies and blame them, no good outcome because those companies are also often the source of our prosperity and our return to prosperity.

So, you can be mad at certain AIG executives that they didn’t forego their bonus or that they were too lawyerly in writing it all out this winter and tricking people with Congress. And yes, there are bad people at all companies, but if we blame AIG, we also hurt a lot of other companies.

For an analysis of Amity Shlaes brand of economics see An important and politically significant guide to the Great Depression (30 April 2009).

I recommend reading the complete transcript to take a full measure of its nuttiness. We have gone through the greatest financial crisis since the 1930’s — the first global recession (wars do not count) — and there these people show no awareness of the need for fundamental reforms. Also, comparing America to the last days of the Czars is nuts.

Most bizarre: in response to tepid discussion of changes, they invoke the ghosts of Communism and Fascism. Revolution and famine. If we jail some senior bankers, our system will collapse because nobody else can run those institutions. This is too crack-pot for serious analysis, but Matt Taibbi does find important meaning in it for all of us.

A reasonable person’s remarks about these conservatives’ analysis

Excerpt from “The peasant mentality lives on in America“, Matt Taibbi, posted at The Smirking Chimp, 14 April 2009:

This must be a terrible time to be a right-winger. A vicious paradox has been thrust upon the once-ascendant conservatives. On the one hand they are out of power, and so must necessarily rail against the Obama administration. On the other hand they have to vilify, as dangerous anticapitalist activity, the grass-roots protests against the Geithner bailouts and the excess of companies like AIG. That leaves them with no recourse but to dream up wholesale lunacies along the lines of Glenn Beck’s recent “Fascism With a Happy Face” rants, which link the protesting “populists” and the Obama adminstration somehow and imagine them as one single nefarious, connected, ongoing effort to install a totalitarian regime.

This is not a simple rhetorical accomplishment. It requires serious mental gymnastics to describe the Obama administration — particularly the Obama administration of recent weeks, which has given away billions to Wall Street and bent over backwards to avoid nationalization and pursue a policy that preserves the private for-profit status of the bailed-out banks — as a militaristic dictatorship of anti-wealth, anti-private property forces. You have to somehow explain the Geithner/Paulson decisions to hand over trillions of taxpayer dollars to the rich bankers as the formal policy expression of progressive rage against the rich. Not easy.

… It’s been strange and kind of depressing to watch the conservative drift in this direction. In a way, actually, the Glenn Beck show has been drearily fascinating of late. It’s not often that we get to watch someone go insane on national television …

After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over.

… But actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit.

Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger.

And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish — can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters! After all, those people earned those bonuses! If ever there was a textbook case of peasant thinking, it’s struggling middle-class Americans burned up in defense of taxpayer-funded bonuses to millionaires. It’s really weird stuff. And bound to get weirder, I imagine, as this crisis gets worse and more complicated.

Conclusion

This puts America in a tough spot. The core of the loyal opposition has gone crazy. The Administration in power continues the policies of the old Administration. To whom do we turn if the economy fails to recover in the second half of 2009? To ourselves. It’s our government. It’s our nation. It’s our responsibility.


--------------------------------------------------------------------------------
Originally published at Fabius Maximus and reproduced here with the author's permission.

The Growing "Bubble" In Government Debt Markets...

This is an excellent article of our financial mess. I fully agree with Satyajit Das...

Second Lesson of the GFC: Whatever It Takes!
Satyajit Das | May 18, 2009
Socialist WIT

The severity of the crisis was underestimated initially. Ben Bernanke, Chairman of the US Federal Reserve in March 2007 stated during Congressional Testimony: "At this juncture, the impact on the broader economy and financial markets of the problems in the sub-prime market seems likely to be contained." In April 2007 US Treasury Secretary Henry Paulson delivered an upbeat assessment of the economy: "All the signs I look at show the housing market is at or near the bottom… The U.S. economy is very healthy and robust."

The grande mal seizure of financial markets in September and October 2008, with the bankruptcy of Lehman Brothers, a large US investment bank and near collapse of AIG, the world’s largest insurance group, highlighted the seriousness of the problems. Since then national and international "committees to save the world" have implemented a bewildering and ever changing array of measures to try to stave of economic collapse.

The actions – dubbed WIT ("What it Takes") by Gordon Brown, the English Prime Minister - have been focused on trying to stabilise the financial system and maintaining growth in the real economy.

Governments and central banks have moved to remove toxic debt from bank balance sheets, inject share capital to cover losses from bad debts and also guaranteed the bank’s own borrowings to allow them to continue to raise deposits and borrow. Bank of England Governor Mervyn King recently summed up the nature of the UK’s support for the banking system memorably: "The package of measures announced yesterday by the Chancellor are not designed to protect the banks as such. They are designed to protect the economy from the banks."

Governments have provided large amounts fiscal stimulus and support for the housing market (in the US). In addition to the normal "automatic stabiliser" effects of reduced tax income and higher social welfare spending in a recession that push budgets into deficit, governments have launched new spending initiatives focused on infrastructure and direct payments to those most affected by effects of the GFC. Central banks have cut interest rates to levels not seen for decades.

It is not clear whether the actions taken will have the intended effect. As John Kenneth Galbraith noted: "In economics, hope and faith coexist with great scientific pretension".

King Canute Addresses the Waves

The pretence of global co-ordination in policy responses, reiterated at increasingly frequent G20 summits, does not accord with the reality of individual actions.

Ireland’s anxious reaction to a "run" on Irish banks prompted a blanket government guarantee on bank deposits. This, in turn, led to a flight to Irish banks forcing the implementation of similar arrangements in other countries. The "electronic herd" did not notice that Ireland was guaranteeing deposits totaling over 200% of its own gross domestic production ("GDP") calling into question its ability to honour these commitments if called.

There have been constant shifts in policy. TARP might well stand for Temporary Asset Relief Program (rather than its real name - Troubled Asset Relief Program) as there have been a succession of wholesale changes in the strategy.

The financial initiatives have not led to a significant easing of credit conditions. This reflects the fact that the capital provided is only sufficient to cover continuing losses but insufficient to restore normal lending and financial activity.

Money supplied to banks is not flowing into the real economy. Banks need funds to pay off maturing borrowings of their own as well support assets coming back onto their balance sheet (known by another three letter acronym - IAG - involuntary asset growth). Companies have also drawn down debt facilities, as their own financial position has deteriorated, requiring the banks to finance these requirements.

Governments and central bankers have become frustrated at the failure of policy actions to help the resumption of normal financial activity. Where governments have taken substantial stakes in banks, there is a noticeable drift to "directed lending". Central banks and governments are increasingly bypassing the banking system and providing finance directly to businesses. The Federal Reserve may soon issue credit cards to all Americans under its own brand.

The debates miss the point that debtors still have too much debt and are not able to service it. Until the debt is written down and restructured, credit growth may not resume.

In the TARP Oversight Panel Report of 8 April 2009, Professor Elizabeth Warren observed: "Six months into the existence of TARP, evidence of success or failure is mixed. One key assumption that underlies Treasury’s …. approach is its belief that the system-wide deleveraging resulting from the decline in asset values, leading to an accompanying drop in net wealth across the country, is in large part the product of temporary liquidity constraints resulting from non-functioning markets for troubled assets. On the other hand, it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth".

The stimulus packages create different challenges. Well-intentioned infrastructure spending will take some time to have any meaningful effect. Skill shortages in key areas of expertise may slow down implementation. The need to avoid "leakage" where spending flows to overseas recipients in a globalised world is also paramount politically. The return on inadequately targeted infrastructure investment is also not necessarily high

Governments must also borrow to finance their spending. Many countries implementing fiscal stimulus packages already have large budget deficits and also substantial levels of outstanding public debt.

In 2009, governments around the world will have to issue US$3 trillion in debt. The US alone will need to issue around US$ 2 trillion in bonds (a staggering US$40 billion a week!). This compares to around US$400-500 billion of annual debt that the US has issued in recent years. This debt must be issued at record low interest rates.

China, Japan, Europe and other emerging countries have been major buyer of this debt. It is not clear whether they will continue to buy US government bonds, at least at previous levels. Wen Jiabao, China’s prime minister, provided a reminder of the importance of this issue in February 2009: "Whether China will continue to buy, and how much to buy, should be in accordance with China’s needs, and depend on the safety and protection of value of foreign exchange." Yu Yongding, a former adviser to the Chinese central bank, recently sought guarantees that the value of China’s US$682 billion holdings of US government debt won’t be eroded by "reckless policies". He asked that the US "should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way."

At best, the tsunami of government debt may crowd out other borrowers exacerbating existing financing problems. At worst, there is a risk of a collapse of the growing "bubble" in government debt markets as investors refuse to purchase debt at current rates triggering additional losses. In January 2009, long-term interest rates moved up sharply as markets started to absorb the import of government initiatives. As James Carville, Bill Clinton’s campaign manager, once noted: "I want to come back as the bond market. You can intimidate everybody."

Current initiatives resemble the "hair of the dog that bit you" cure where ingestion of alcohol is the treatment for a hangover. The current problems can be traced to high levels of debt accumulated by banks, consumers and companies. In effect, this debt is now being replaced by government debt. Simultaneously, the debt fueled consumption of consumers and companies is being replaced by debt funded government expenditure.

Adjustment in the level of debt and asset prices is part of process of through which the global economic system re-establishes itself. Governments and central banks can smooth the transition but they cannot prevent the necessary adjustments taking place. Like King Canute, central bankers and finance ministers cannot hold back the tide.

Multiplication by Zero

Like an athlete using drugs to enhance performance, the global economy used debt and financial engineering to enhance global growth. Increasing stimulus was needed to maintain performance in an unsustainable Ponzi scheme. The removal of performance enhancing drugs has exposed fundamental weaknesses.

A simple way to think about value in the global economy is in terms of Irving Fisher’s transaction equation:

Real Economy = Financial Economy

Where

Real Economy = Quantity of Good times Price of Goods

Financial Economy = Money Supply times Velocity of Money
Therefore:

Quantity of Good times Price of Goods = Money Supply times Velocity of Money
The financial economy represents claims on the earnings and cash flows (both current and future) from producing and selling real goods and services. The financial economy consists of the money available and how rapidly the money can be circulated through the global economy (velocity). Banks provide much of the velocity of money in the economy through its borrowing and lending activities where a small amount of capital is leveraged to create larger amounts of money in the form of debt.

Recent economic prosperity was primarily driven by growth in the financial economy – increased money supplied by central banks augmented the rapid growth of and innovation of financial techniques within the banking system that increased the velocity of circulation. This increased the value of the real economy by increasing prices and also stimulating the expansion in the supply of goods and services.

The GFC has sharply reduced the financial economy, specifically it has decreased the velocity of money. As any student of mathematics knows anything multiplied by zero is itself zero.

The reduction in the financial economy necessitates a corresponding reduction in the real economy, initially in prices and ultimately by reducing the quantity of real goods and services. Falling prices of financial assets (claims on real goods and services) and, more recently, reductions in production volumes reflect the required economic adjustment process.

Government actions, however well intentioned, seem primarily to be based on the recognition that Ponzi or pyramid games are only bad if they end. All efforts are now seemingly directed at keeping the game going for as long as possible!

In 1976, James Callaghan, the Prime Minister, delivered the following grim assessment of Britain’s economic situation that is still relevant today: "We have been living on borrowed time. We used to think you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candor that that option no longer exists."

Government actions, however well intentioned and significant, may entail pouring water into a bottomless bucket.

© 2009 Satyajit Das All Rights reserved.

Satyajit Das is a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006, FT-Prentice Hall).

This article draws on the ideas first published in Satyajit Das "Built to Fail" in The Monthly (April 2009) 8-13

The History of History___Eclecticism___Where Is It?

“We should chiefly depend not upon that department of the soul which is most superficial and fallible (our reason), but upon that department that is deep and sure, which is instinct.” - Charles Sanders Peirce

Far too much about history has been stated in narrow analytical diatribe, inconcise nonsense, and pure empty rhetoric… Why? Are we really that dense? A simple first example; Aristotle___Most think he’s great because he wrote about a beautiful system of ethics, true enough, but what about his non-sensical silly-gistic proposition/predicate logic, or whatever you want to call it? Then along comes Kant with another beautiful system of ethics and arithmetic liberty, but what about his wedge driven between the “logica utens” and the “logica docens”? Was there any need of these two great minds dividing our natural senses so miserably? So nefariously? Then, just as the world is starting to come out of its stupidity, with Boole, DeMorgan, Jevons, Peirce and Shroader, along comes Frege with more of the same old divisions of logical sense/nonsense(and conflation), which has continued through Cantor, Piano, Russell, Wittgenstein, Carnap, Quine and Chomsky, ruling most of modern intellect. Oh, and don’t let me forget Hegel___That wonderful over-worshiper of state. Neitzsche? Another life hater. Beautiful story, ‘ain’t’ it…?

Is it true? How would you tell truth? Really, tell me… Napolean existed___True. Stalin existed___True. Hitler existed___True. Mooselini existed___True. Hussein and Bin Ladin existed/exist___True. Is this the type of truth the world really believes? Is there any real truth of “Power”? Does anyone on Earth know what the truth of “Power” really is? Is power logical to itself? Yes. Is power ethical to itself? Yes. Is power truthful to itself? Yes. Is power honest to itself? Yes. Is power all the above to a majority of its citizens? Yes, more often than we care to think about. Believe me, Caligula and Machiavelli have no one-up-ness on most of the modern world, it’s just that now, we do it all with the power systems of money___The Corporate Military Industrial Complexes.

Let’s take an eclectic look at historical power, through the eyes of logic, math, philosophy and money, Ok? What made it all go wrong? Simple question___Complex answer. Let’s rephrase it. What made it all go mathematically so wrong? That can be answered. Let’s look at the actors and players, mainly from history’s most influencial source___The academics. At least, most of them think they’re the most influencial source of change and refinement. Why is it we have such genius arithmetic scientists, and yet such meager philosophers of the mathematical sciences? Is it accidents of history, the complexity and time study constraints of history, or possibly the laziness of philosophers to truly learn the requisite maths, to more effectively describe mathematical histories’ and meta-histories’ truths?

Looking back at the early Greeks, we find great advancements by the geometers and the Pythagorean Schools, up until Aristotle. Then___What happened? The Pythagoreans had developed a most advanced triadic math and logic, with a necessary “mean terms”. They had the “Triadic Law of Mean Terms”___“The Triadic Principle”. This was a very pragmatic system of math and logic as attributed to them by Socrates, and much of Plato’s dialogues. Even Aristotle’s early work on the Nicomachean Ethics was excellent work, when he was still influenced by Plato and the Pythagoreans, but things shortly changed. The change, due to much critical Greek antagonism, may have forced Aristotle to try and sure up his philosophy, but without the genius influence and help of Plato, Aristotle went down a very confusing and false road. He separated the “logica utens” and the “logica docens” into two entirely distinct schools of thought, with his three laws of logic, and the main fault being the “Excluded Middle”. This put his logic in direct opposition with Pythagorean Triadic Logic and Math, with a new less powerful Dyadic Logic and Math. Archimedes tried to salvage it, as did Eudoxas, Nicomachus and Apollonius, and later the Arabic speaking nation-states, with their “Houses of Wisdom”, also tried to salvage the early Greek ideas, yet to no avail, when Averroes came along. Aristotle’s logic won the day, over the more able Triadic Logics of the early Pythagoreans, as the early Greek and Byzantine knowledge systems slowly crept into Europe. Could this have been different? Why was it so disasterous?

We all know the history by now. The “Port Royal Logic” School accepted the less capable and confusing “Dyadic Logic” and “Math Systems” of the Aristotle influenced schools. Even Galen had clearly shown the faults of much of Aristotle’s system, and the Arabic peoples, up to Biruni and Avicenna, clearly tried to right the wrongs, to no avail, so we finally ended with two distinct logic and math systems and schools of thought, right down to this day, but more of the history needs mentioning. Many mathematicians and true working scientists, through the years , always followed the true Pythagorean, Euclidian and Archimedean Schools, but most philosophers of, and many more falsely influenced scientists and mathematicians followed the more confused logic, arithmetic and (modal schools, which the Byzantine’s had created). Then along comes the enlightenment, to pull the wool fully over everyone’s eyes, for many years to come, with Descarte’s further separation of mind and body, etc., etc., and finally to the point everything was so confusing, Kant came along to try and straighten it all out. But, he ended separating the “Utens” and “Docens” even further___Nice try, but no ringers. Oh, there was his excellent mathematical ethics and liberty papers, but the true philosophical and final sense separation was devastating for logic and math systems for the next 150 years. You see, math and true mathematical logic are of the “logica utens” and most philosophers describe this true a priori ground as though it’s of the “logica docens”, and herein lies all the confusion.

Now, was this accidental or pure laziness, on the part of the philosophers and historians? I can’t truly answer this, but if life’s experiences are any guide, there’s a good percentage of all trades, crafts and professionals that are just plain lazy and downright slackers, so my money is on history really being controlled by this lazy-slacker element of all societies___Period…! The bad runs both up and down hill. No matter how brilliant anyone wants to think the professional classes are, that’s not my experience of life, at near 64 years of age, and this is why the human element of any system’s success is dubitable, unless we can turn much of society’s bad elemental powers over to properly algorithmatized computers___I have no faith in humanity changing, even if they realize their lives are at stake. I think there’s just far too many lazy-slackers who just wouldn’t believe it if the “Bear” were staring them in the face. They’d say, “Nice Bear”.

Well anyway, after Kant got through trashing the system, along came Hegel kissing up to the state, and a metaphysical “Notion”, after Kant had already created the “Thing In Itself” boogy-man. There’s really a ‘lotta’ interpretation in those two ideas, kinda like Wittgenstein’s “Private Language”. Yeah, I admit we all do have private self-languages, but that’s not what ‘Witt’ meant, and we all know that. As I mentioned earlier, others came along in time to straighten the world mess out, but America’s invasion by Europe’s WWI and WWII hoards of professional miscreants clobbered us, and down to the bottom of the barrel went Peirce, and his student Veblen, to only be replaced by English and European mediocrity, ending the only true and valid “Triadic Systems” revival, at that time possible.

Luckily, the last few decades have begun to change the world intellectual picture, even if it’s still but in the periphery, Peirce’s, Jevons’, Veblen’s and Keynes’ views are coming back into vogue, through the new heterodox schools. It only takes a quick Google search to verify this___millions of hits, thank ‘god’, when all epistemic and cognitive searches are done. So let’s take a quick look at the possible revival of “Triadic Ideas” as relates to the “Semantic Web” possibly not being so parasitic on the “Pragmatic Web” in our highly possibly better future.

How can we best represent global power systems? Capitalism? Socialism? Communism? Social Contracts? Contractarianism? Nationalism? Or Social Democratic Capitalism mixes? Taking an eclectic view, allowing a triadic isomorphic systems logic, which would recognize our better nature’s priority over our higher nature’s ego, we may have a shot at a new and total understanding. Are any of these systems true? Are any of these systems value validity preserving___sustainable? We’re certainly going to have to admit the present system has failed, or at the least terribly mis-fired. Are we going to have to rebuild it? Replace it? Coddle it? Or outright change the entire system for something entirely new? Does anyone really know about Keynes’ total system of “International Exchange Clearing, Bancor and Emergency Jobs Banks?” Does anyone even truly realize we have the computational ability to figure new systems from a future model’s arithmetic completion position? Can anyone even believe this? There’s lots of talk of adopting amalgamations of old tried and failed systems, but not much of Keynes’ true “Middle Way.” What if there’s an even better “Middle Way” compatible with the yearnings of entire generations’ better nature’s and higher natures? Surprise___There is, and has been for years. I, Paul Davidson and Jane D’Arista have been offering just such systems for years, but where’s the eclectic understanding, high enough, to see the possibility of a “Semantic Web” evolving the “Pragmatic Web” to a really new and true “Knowledge Web?” Not just more of the same, but a full-fledged, benign, algorithmic computerized system, capable of eliminating the un-necessary parasitic powers, that now rule the world economies to madness. I’d suggest studying Macromouse, The Awakening of the American Mind, Paul Davidson’s massive body of academic work, or Jane D’Arista’s ideas, then maybe we’ll have a chance.

There’s no sense me re-writing it all here again, as it’s all been posted at these sites. Charles Sanders Peirce, and his relational quantification logic, is the key mind to putting together all the “Triadic Isomorphic Logic” necessary to accomplish the above…