Economics Sorta

[Michael Stuart Kelly]

Economics Sorta

Someday I want to make an Economics section here on OL. I haven't so far because I never understood economics, even after reading Rand and Mises and others.

I understood that there were big words flying around all over the place and I understood that the experts (and people in general) always yelled at each other, some of it really nasty, but I could not make it work as simple logic connected to reality (i.e. reason).

But I've learned. And until I make that Economics section, here is a new thread to stand in for it, sorta.  

 

Watch the video below and you will learn more about economics than all the books written on the economy for all of human history, even Capitalism: The Unknown Ideal.

Greenspan Announces We Can’t Go Bankrupt

RUMBLE.COM

---

Become a Premium Member: https://www.jimmydore.com/premium-membership Go to a Live Show: https://www.jimmydore.com/tour Subscribe to Our Newsletter: https://mailchi.mp/jimmydorecomedy/ytlivestreams LI

Alan Greenspan came out and said--openly said in these terms--that the US can never default on debts because it can just print more money to pay those debts. Greenspan's own words: "Zero probability of default."

In fact, here is his exact quote from the video. I give you Alan Greenspan, Ayn Rand's spokesman for the economy, ladies and gentlemen:

Quote

The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.

 

The current dude who is advising Biden and his gang of crooks, Jared Bernstein, the Chair of the Council of Economic Advisers, says the same thing. We just print our own money. Bernstein is in Jimmy's video, but here is another version of him falling all over his own feet.

 

When Jared Bernstein was asked the obvious question about why the US borrows dollars when it could just print as many dollars as it wants at any moment, he could not explain it. Not only that, he said the government prints money and it borrows money. True. And that doesn't make any sense to him, but it all makes sense in the end.

btw - Jared Bernstein studied music in college, not economics.  

 

None of the people who talk about this who I have come across, not even Jimmy and his guests, mention the following (although many hint at it). But here's how the economy works in a nutshell.

When the US government wants more money than the taxes it confiscates from citizens, it issues Treasury Bonds (which are IOUs at root). It sells those IOUs to Federal Reserve banks (private banks). There are a small number of desks in Federal Reserve banks that have super-powers. They are the only ones in the world that can buy US Treasury Bonds (IOUs) and make up their own dollars to do that without being arrested for counterfeiting.

A dude (or lady) with a computer simply types the dollars into the authorized Federal Reserve bank account, then the bank buys the Treasury Bonds (the IOUs) from the government.  Those bits and bytes have become transformed by magic into dollars. So the Federal Reserve bank (usually Chase) sends those new magic dollars (counterfeit dollars if you think about it) to the US government in exchange for the Treasury Bonds (IOUs).

Poof. Dollars created out of nothing but fingertips typing on a keyboard.

The government has to buy those bonds back (pay off the IOUs) in the future with dollars, not fingertips, but nobody worries about that during this phase.

 

And, to make matters even more confusing, the Federal Reserve uses the Treasury Department as its printing office to literally print more Benjamins, print more physical dollars. (Mint, too for coins.) But those physical dollars go to the Federal Reserve, not to the US government. The Federal Reserve pays a small printing office fee to the US Treasury Department to print those new dollars.

Keep this in mind. The newly printed dollars are owned by the bank, not the US government.

What's more, the Federal Reserve bank that bought the Treasury Bonds (IOUs) can send some of the newly printed dollars to the US government if it needs to as part of these dealings, or for other things for that matter like its own taxes, but by this time, everyone and their families are dipping into those newly printed magic bank dollars.

 

Alan Greenspan knows this. Look how far he has fallen as a former Randian.

Jared Bernstein doesn't even realize it.

 

The question is why do they do it this way?

The answer is simple. Smokescreen.

People would revolt if they thought the government just printed money to pay its bills. People would think that was unfair because they can't print money to pay their own bills.

Enter human nature. People need a complication in order to not think about it. People want to deal with their own values like eating and home and family and personal interests. When people talk about money and math on a large scale, they get bored, they get greedy, and they get fearful. They do not engage their reason. They only engage their opinions.

The convoluted Fed scheme allows the insiders (who do use their reason to pull off the con) to come up with a ton of jargon and misdirection and the public just assumes that all these experts know what they are talking about. After Greenspan left being Chairman of the Fed, he openly bragged about making up confusing jargon shit when talking to Congress. Since the members of Congress were worried about their own plans and careers and lives, and they were all bored with the math, not to mention being greedy and fearful, they swallowed it every time.

They wanted a posture of certainty from an expert, not math.

And posture of certainty is what Greenspan delivered. Even today he does this certainty gig better than anyone. What could be more certain than "zero probability"?

 

In fact, Bernstein's wobbling is doing more to undermine the Fed than any amount of stealing or embezzlement or endless war for profit or double entries or overly-creative bookkeeping could do.

Bernstein doesn't look certain.

He tries to, but he's using clear words, not jargon. Clear words the public and understand. So the contradictions are too obvious to come off as certainty. They look like lying. Or ineptitude. And when he says, "I don't get it. I don't know what they're talking about," he puts a stake in the heart of the vampire smokescreen. The vampire crumbles and the smoke dissipates.

And the people in the public? What do they do? Hell, just look around you. They suddenly wake up and go, "WTF?"

 

That will kill the Fed more than anything else on earth.

 

That, ladies and gentlemen, is all you need to know about economics to understand it. Posture of certainty is the fundamental value, not math.

All the math that economists (of all stripes) come up with has one purpose only: to cover up the emotions that turn off reason, to replace reason with an illusion of reason.

And what are those emotions? Boredom, greed and fear.

You can take it from there.

 

Michael

[Michael Stuart Kelly]

I keep harping on the following, and most people agree.

Until a certain point.

At that point, they no longer see this.

Like with endless war for profit.

Michael

[Michael Stuart Kelly]

Now that we understand that for any economic theory to be accepted in the world, all the experts in any one theory have to do is talk in a tone of certainty, what do we do with this fact?

Well, if we want unearned wealth and power, we choose the theory that produces an elitist class.

If we want to use productive achievement and property rights as the basis, since that system works well for raising all boats, we have to recognize reality, all of it, and connect that reality to our economic theory.

And, of course, speak in a tone of certainty.  

Believe me, if we do not speak in a tone of certainty, people will follow others with other theories who do talk with certainty. Just look at the spread of communism if you don't believe me.

Ayn Rand and others were very good at connecting capitalism to reality while speaking in a tone of certainty. But they all left out one fundamental reality fact. It involves power.

 

You can have power over other people by using force on them. And you can use persuasion on them to get power. Those are the standard ways people discuss power. But there is one other thing you can use. You can use people's own money to get power over them.

Here is reality. I got every penny in my pocket from the hand of another person, no matter how remote that person is from me. And if I got something from someone, that implies a relationship, no matter how remote.

If I pick a fruit from a tree, that implies a relationship to reality. But money comes from humans, not trees. So when I get money, I also get the relationship with another human or humans.

Now, what happens if I can control the actual money in someone else's hands. Their money? What if I can nibble at it using various forms of trickery, and what if I can abolish the very currency they use and make it worthless? What is my relationship to that person?

Easy.

I have power over that person and power over his or her relationships that are based on money.

I have power.

Power over money equals power over the people who use that money. Power over their means of survival, their production, their property, their estates. I can turn them all into slaves by turning off their money.

And here is another reality. Wherever the potential for power over other people exists, there will be some individuals who will show up to claim and exercise that power. That's just a law of human nature. Like all things in reality, ignoring this will not make it go away.

The only way mankind has been able to deal with this reality within the context of money so far has been to mount a separate power structure based on force and persuasion (a government) and use that structure to make the rules for who gets the money-power (control over the money supply).

When governments have let more people get money, the society has prospered. When governments have allowed only elitists or insiders to get money, the society has been poor.

And when societies based on force and persuasion have run out of money, whether prosperous or poor, and printing more money hasn't worked, they waged war and simply took wealth from others. That made their money worth more in human values, at least for a time.

This has been true throughout all of human history and it is still true today.

 

Now what happens if a different way gets invented? What if someone managed to divorce power from money? Not all power. A man with a lot of money can still have the power to use it to get what he wants from others (if they agree). But what if a way happens where one man can no longer control the money of another man? Ever?

That, to me, is the perfect solution. You eliminate the potential to get power based on other people's money by eliminating the possibility of getting power that way in the first place.

That way now exists in the world.

It is called Bitcoin.

 

 

That is how we connect our economic theory to reality--the reality that power over the money of other people equals power over them. Bitcoin does not allow any person or government to get power over other people's money.

Bitcoin cannot be confiscated without the individual owner's long complicated codes. Those codes can be confiscated by trickery or torture, but that has to happen individual by individual. There is no collective way to do it and no government can make trickery or torture on an individual bases alone work as the glue to a social contract.

Bitcoin is the implementation in reality of the individual right to property. 

And it works for all individuals in equal manner.

Just as the Bill of Rights in America elevated the individual and lowered the power of tyrants, in like manner Bitcoin elevates the individual owner of money and lowers the power of money-supply tyrants.

 

Just think. With Bitcoin, you don't even need a tone of certainty to fool others for it to work. It is designed to work as property for individuals, not collectives.

I guess tone of certainty will be needed as it gets implemented throughout the world, but after it is widespread, that tone of certainty will still be around in the same way people refer to the right to life, liberty and the pursuit of happiness: in other words, to identify a system that works, no longer to persuade.

Michael