Archive for February, 2017

There is only us people here…

Posted: February 14, 2017 in Monetary System
Tags: , ,

There are no such things as ‘Corporations’. These entities only exist on paper in legal form, in reality, companies are just people some of whom fulfill multiple functions; employees, customers, shareholders. Some customers are employees. Some are both that and shareholders….where are the incentives and who are the ultimate beneficiaries therefore? If you fine a company, or tax it, the customers and the employees are the ones that foot the bill.

There are no such things as ‘The State’. They are just legal entities, sometimes, not always, bound together by another legally binding piece of paper, called a constitution, but who are the governments, the police and the army…they are same people who pay taxes, vote and follow the law? If a government takes on debt, it’s the citizens who pay it off.

Any institution is made up of only people. Behind the logo, behind the image and the advertisements and the facade…there are only people

And what of ‘The Market’….no it is not some miraculous spirit, beyond the flaws of human behaviour….it is made up of irrational humans itself, subject to whims like anything else, sometimes herd mentality will run supreme, other times we may get genuine independent movement, however let us not be fooled that it is not subject to manipulation and power plays, just like any other area of human activity.

But here’s a preview: it comes down to the fact that the people “in charge” of the economy fundamentally misunderstand it. We call it the machine metaphor: thinking of the economy as a machine with levers and pedals and gauges that can be operated to make it run faster. Of course the economy isn’t. It’s much closer to a natural ecosystem, made up of the free decision-making of millions of people.

In the machine economy, you become a cog. The state becomes the operator. It’ll pull whatever levers it can to try and make the machine run the way it wants. If that destroys a cog, so be it – the machine itself is more important.

Nick O’Connor, MoneyWeek

Prices change expectations (or perhaps “beliefs” is a better word), which change behaviour. Behaviour changes prices, which change expectations/beliefs. On and on it goes.

John Stepek, MoneyWeek

These are all examples of constructs; created structures that man builds and then becomes oppressed by. Invisible to the eye yet all encompassing, let us not be fooled in believing in apparitions….. some people think that is what ‘religion’ is for.

Who are the clergy, the establishment, the monarchs…..they are just people too. The consume, defecate, procreate and expire

Do not fear that which we create and build with out own hands and minds.

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One argument which is used to discredit any realistic attempt to return to a gold standard in todays environment of ever expanding money supply, is that currently there is too much money in the system and too little gold to be able to adequately replace one for the other.

Well, Jim Rickards has one answer for us to consider…..

It is true that at today’s price of about $1,300 an ounce, if you had to scale down the money supply to equal the physical gold times 1,300 that would be a great reduction of the money supply.

That would indeed lead to deflation. But to avoid that, all we have to do is increase the gold price. In other words, take the amount of existing gold, place it at, say, $10,000 dollars an ounce, and there’s plenty of gold to support the money supply.

The limiting factor here is not the commodity….but the price itself.

Basic supply and demand economics and its impact on price…..don’t let so-called experts make simple concepts seem impossible. We can’t change the quantity, so change the price! Guess that means the market does not give us a correct price signal in view of this?

I’ve done that calculation, and it’s fairly simple. It’s not complicated mathematics