Question on the gold standard

[moralist]

Both are moral and and of a piece out of free-willism, but to get to moral in thought and action one needs to think things through,

Thinking is ok, but there's something better. And that is seeing directly, right in the moment, what is morally proper to meet the present... and simply doing it.

not just go with pleasure-pain a la all those other animals.

--Brant

God forbid. Transient irrational leelings are the absolute LEAST reliable guide to doing what's right. Thoughts are relatively more reliable than feelings if the thinker can discriminate between thoughts about what's actually right, and devious deceptive convoluted intellectual justifications for doing what's wrong.

Seeing directly in the moment is the best, as it does not rely on either feelings or thoughts.

Greg

[caroljane]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

[moralist]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

[Brant Gaede]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

If you haven't lived.

--Brant

but you have

[moralist]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

If you haven't lived.

--Brant

but you have

I know that I'm trying to describe an ability that people possess but don't realize they have it, because we already rely completely on thought and emotion to guide our actions. Zen Buddhism recognized this obscure latent ability to act spontaneously from what is seen in the moment and designed a variety of exercises to develop it.

Greg

[Brant Gaede]

I know that I'm trying to describe an ability that people possess but don't realize they have it, because we already rely completely on thought and emotion to guide our actions. Zen Buddhism recognized this obscure latent ability to act spontaneously from what is seen in the moment and designed a variety of exercises to develop it.

Greg

Whatever works for you--or whomever. It's interesting, the way it's interesting in trying to figure out something I don't know much if anything about.

--Brant

Zen warrior?

[Frediano]

Fredianno writes: 2] Credit is current spending in exchange for a claim on future creation of value-- value that doesn't exist yet.

Credit is Future Money. We are playing a limited time machine game by (in a manner of speaking) taking money from the future (which really does not yet exist) and investing or spending it in the present. At some point Future Money has to be replaced by Here and Now Money. Otherwise there is a hole in the flow and a Disturbance in the Force.

Isn't it 'present money' in exchange for 'future value' = 'future money principal plus interest?' The 'money' in the future actually does exist -- it circulates and recirculates. We pay back credit over time by diverting flows of income (we pull on pump handles in the future-- we create new value-- and by doing so, we circulate money -- it flows over time as an income stream, generated by us pulling on pump handles.) The 'money' circulates-- but what is real is the value.

We don't borrow money currently because we want money, we want the value in the present that money can buy in the present. The value we create -- in the future-- to get the money (could be old money recirculated in the economies) doesn't exist yet. The money is a value-proxy, a medium of accounting trasnfer based on IOUs. (When you are holding money, you effectively have an anoymous IOU in your hand. It's current value doesn't matter if you yourself offered up an IOU to get it-- credit-- or took it from savings -- past pulls on the pump handle, deferred value consumption. hat only matters to you, since you made a commitment to pay back your IOU. But the person handong over value in exchange for your IOU has no immediate sense of whether it is from your credit account or your savings account; in his hands, it is now an IOU for value.

So, as you say, credit is like a hole in current value. But savings is the opposite -- it is like a pile(the opposite of a hole.) It represents -past- value that was not immediately consumed by you. You accepted IOUs for past value, and put those IOUs in savings.

So in the economies as a whole, there is no net 'hole' as long as credit is balanced by savings+investment. Which is disturbing, when we consider there is only private savings and investment to balance the sum of all private+public credit. There is no such thing as public savings(with rare excepions--local school district capital fund accounts.) Modern profligate governments spend everything they tax and then some!

The 'normal economies' alchemy is as follows:

1] Young consume credit, offering a claim on value they will create in the future.

2] Middle age save/invest excess current value, to save for their future.

3] The old live off their savings.

Most -real- value deteriorates; when the Middle Age defer excess present value and try to convert it into an aqctual future value, the way that can be done on a fair accounting basis is through the alchemy of balanced savings/investment and credit. We are all, normally, all of us, all of the above at different stages in our lives. It is an assembly line of magic that converts deferred present value (which is finite, which will not last forever)into an actual future value.

Compare with just shoving dolalrs under a mattress. That results in a little bit of deflation at first, followed by a little but of inflation later, but this does not net out to 'zero', it nets out to loss of value in the economies over time, because of the Universe and its harsh entropic rules. When most value stands still, it deteriorates. Future effort must be exerted just to break even. This is why interest exists. Economies could no more outlaw 'interest' than they could outlaw 'depreciation.'

Paying back credit with interest does not create any 'hole' in our economies money supply; we simply pull on pump handles and circulate money. Our income is not a static pile of cash; our income is a flow of money past our pump station over time. We divert a fraction of that flow to our static overhead savings tanks(to accumulate past pulls of the pump handle/IOUs for value), our static overhead credit tanks(to restore available credit and reduce interest payments). When we pay principal and interest, money doesn't leave the economic system-- it is effectively transferred from the current accounts of debtors to debt holders-- from those who used credit in the past to those who offered what could have been savings/investment.

No 'hole' in the money supply. Just circulation of effort/value via value-proxies(money.)

Until...the government inserts itself and fined creative ways to tax everybody.

There is a bypass at the exit of our pump stations that goes to government, as taxes.

The government, along with us and a portion of what remains after net in/out to savings and credit, all go to the turbine stations to consume value. These are businesses/vendors/the marketplace. At the discharge of the turbines is another bypass, that gets sent back to government. These are business taxes. The government can spend this bypass again. (You and I just need to pump harder at our pump stations...)

Business owners pay costs and pay workers and pay themselves with the flow that is left net of the government business tax bypass, and this is what is recirculated at the inlet of the pumps. We convert that into spendable cash/water by pulling on pump handles. Business owners also pull at pump handles, but their return is not guaranteed as so much wages per pump pull. They pull at their own pump stations and also build pump and turbine stations at risk, in order for an opportunity at unlimited ROI. But that isn't guaranteed to be positive, or worth the effrot or risk.

The Fed acts like a (leaky) boiler feedwater valve. New current accounts/cash shows up in the credit tanks of individuals(and government, when it sells Treasury bonds to the Fed that pump pullers will someday pay off, plus interest). The FED can't inject water into its won spendable current accounts and spend it at the trubines, however, it can only hold debt. Our Fed 'leaks' because it returns 'interest' back the government to spend at the turbine stations. That is one source of endemic inflation.

[dldelancey]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

How would you ever know not to touch a hot stove?

[Frediano]

With that model of the economies, you can see why QE1 and QE2 didn't work. $2T in funny money was created on the government's credit tank(to be paid back int he future by the pump pullers.) This money sloshed through -some- of the turbines, extracting value from the economies. But the extra water had no place to go...so it sloshed out of this model and into a side mode-- the equities marketplace, where it showed up as inflated stock prices. America said "How can there be record highs on Wall Street when there is no water circulating in the system? No new pump and turbine stations, with more people pulling at pump handles?

Because there was no -new- value in the economies represented by the manufactured $2T in current accounts. he funny money just ran downhill, and then showed up as inflated stock prices as long as the dwonhill tsunami of funny money was maintained.

Risk takers -saw- the capricious nature of this government, its selective fatfingering of the economies, the hosing of the GM bondholders, the Solyndras, etc. Risk takers -- the folks who build pump and turbine stations at risk -- had decreased incentives in this environment to take on risk and prepay their own ransom -- to become the next GM bondholders -- and so, took a pass.

So, here comes Hell to pay-- the $2T in QE1 and QE2 bonds need to be repaid, with interest. By who? By the pump pullers. The failed theory was, this would happen when the economies were booming.

Uh-oh.

QE1 and QE2: a secretary printed 12 zeros on a piece of paper.

Paulson...Geithner...now Bernanke... slowly heading out of Dodge before it becomes apparent to everybody what a collossal blunder this was.

Yellen's solution? "More zeros!"

The Yellens and Krugman's et all focus exclusively on policies that run economies only downhill. They don't acknowledge the role of risk in running uphill. The call it 'pump priming' but they've clearly never actually primed a pump; after you prime it, you must actually pump it. Otherwise, all you've got is a siphon, and eventually all the water has run downhill...

And so, we get there; to the bottom of every hill imaginable.

[moralist]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

How would you ever know not to touch a hot stove?

You can obviously feel radiated heat long before you get to the point of actual physical contact. However, someone who is not aware of what's going on around them can easily get burned simply by not paying attention.

That's the purpose of pain... to get you to pay attention.

Persistent unawareness of the world around you as a way of life can literally carry fatal consequences.

Greg

[moralist]

With that model of the economies, you can see why QE1 and QE2 didn't work. $2T in funny money was created on the government's credit tank(to be paid back int he future by the pump pullers.) This money sloshed through -some- of the turbines, extracting value from the economies. But the extra water had no place to go...so it sloshed out of this model and into a side mode-- the equities marketplace, where it showed up as inflated stock prices. America said "How can there be record highs on Wall Street when there is no water circulating in the system? No new pump and turbine stations, with more people pulling at pump handles?

Because there was no -new- value in the economies represented by the manufactured $2T in current accounts. he funny money just ran downhill, and then showed up as inflated stock prices as long as the dwonhill tsunami of funny money was maintained.

Risk takers -saw- the capricious nature of this government, its selective fatfingering of the economies, the hosing of the GM bondholders, the Solyndras, etc. Risk takers -- the folks who build pump and turbine stations at risk -- had decreased incentives in this environment to take on risk and prepay their own ransom -- to become the next GM bondholders -- and so, took a pass.

So, here comes Hell to pay-- the $2T in QE1 and QE2 bonds need to be repaid, with interest. By who? By the pump pullers. The failed theory was, this would happen when the economies were booming.

Uh-oh.

QE1 and QE2: a secretary printed 12 zeros on a piece of paper.

Paulson...Geithner...now Bernanke... slowly heading out of Dodge before it becomes apparent to everybody what a collossal blunder this was.

Yellen's solution? "More zeros!"

The Yellens and Krugman's et all focus exclusively on policies that run economies only downhill. They don't acknowledge the role of risk in running uphill. The call it 'pump priming' but they've clearly never actually primed a pump; after you prime it, you must actually pump it. Otherwise, all you've got is a siphon, and eventually all the water has run downhill...

And so, we get there; to the bottom of every hill imaginable.

The only prudent course of action is to protect yourself by maintaining a safe economic distance between you and those who are reaping what they sow.

[Ellen Stuttle]

Carol,

I'm disappointed.

I thought that you would come up with something hilarious when I pointed out - #68 - that you wrote "sudden tycoon" instead of "sudden typhoon."

Ellen

Can I have my money back?

[Derek McGowan]

I like you guys already, I see I'll have to post a full introduction in the very near future.

My response to the ongoing debate over being responsible for everything that happens to you...

This reminds me of my days as a Spades (cards for those who dont know, a four player-two team card game) player. After me and my partner would humiliate the opposition they would always begin to complain to one another, "Why didn't you do this? Didin't you see what I was trying to do? etc. My partner and I would then step in to end the bickering, "Don't blame each other," we would say, "Blame US!"

My point being that, we do not operate in a vacuum. You guys examples were of natural disasters or physical accidents which would prove hard to "blame" someone for, but I suggest we can use examples based in the economy. If we can agree that there are sentient, creative minds operating outside of our own then we also have to give some credit to others when we are defeated. A few real world examples

Suppose you are a successful small time business owner, but then Walmart moves in and you go out of business. It cannot be blamed on you because you couldn't compete. Unfortunately Walmart is A. too skilled (as in an ability to dominate an industry) and B. the decision makers are far to removed from you for you to be able to negotiate with them.

Suppose you are a successful small business owner in a small town where a major factory employees 50% of the working population. You don't work for them but you supply them, or feed the employees etc. They decide to move to another state or they go out of business. Your business collapses in no way due to fault of your own.

Suppose you have a sibling that is a big time author, movie star, Senator, or something and the family name gets you plenty of clients (and I dont mean through cronyism) but then your sibling does something stupid. Through no fault of your own the family name is now a liability and your business fails.

I guess you could then say well its still your fault that you didnt have a fall back plan, but it becomes unrealistic if you truly follow that line of thought. Because that line of thought would fault you if you didnt have a 2nd 3rd 4th 5th 6th 7th.... fall back plans in case the others failed. Also your plans have to be substantial because if you have a certain lifestyle with certain family obligations, you cant simply say, "If this great business fails then I still have my bachelors degree from the liberal arts college"

[Brant Gaede]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

How would you ever know not to touch a hot stove?

My Mother told me so--oh.

--Brant

love Mom

[Brant Gaede]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

A bad person could easily set you up for a sucker punch.

--Brant

honor those prejudices

[moralist]

I deduce from this that in every life situation, you already know, or "see", as a result of previous cognitive decisions, what is your preferred course of action.

Not necessarily.

The ideal view that's closest to objectivity is calmly seeing every situation fresh and new with no previous intellectual of emotional prejudices, and then taking spontaneous action.

A bad person could easily set you up for a sucker punch.

There would have to be a real world reason to cause your imaginary situation. Imagining will definitely get you blindsided by reality... and you don't even need a bad person to do that to yourself. ; )

Greg

[moralist]

My response to the ongoing debate over being responsible for everything that happens to you...

Hi Derek,

I'll just point out that you're responding to your own version of the debate... but I guess we could debate about that, too. ; )

So just to be clear about the starting point: My view is that we are each personally responsible for the consequences that are set into motion by our own actions.

Greg

[Derek McGowan]

I thought that I was responding to the idea that you "deserve" whatever you get in life. I thought some people were saying that that is not always the case and that their are things that happen to you that are outside of your control. I was agreeing with them. But if thats not what everyone was talking about then.... maybe I shouldn't be on this forum cause clearly the conversation is beyond me!

[caroljane]

No, Derek, you had the right impression. BubbleMan defines his own terms and talks essentially to himself.And very well too.

[Michael Stuart Kelly]

Greg,

Are you into Esther Hicks -- Abraham?

Even marginally?

MIchael

[moralist]

I thought that I was responding to the idea that you "deserve" whatever you get in life.

I thought some people were saying that that is not always the case and that their are things that happen to you that are outside of your control. I was agreeing with them. But if thats not what everyone was talking about then.... maybe I shouldn't be on this forum cause clearly the conversation is beyond me!

Please don't run off. If you want to discuss your ideas on the topic, please continue. I was only stating my view to clarify the difference between it and what you were disagreeing with. Your original statement wasn't my view:

My response to the ongoing debate over being responsible for everything that happens to you...

I had only stated my view to show the difference between it and your statement.

Greg

[Frediano]

In the new shed risk model, who 'deserves' to bear the downside of risk via forced association?

As in, for those who did not willingly enter a risk transaction, which of them 'deserves' to bear the downside of risk?

If I wanted to buy stock in GM, I'd buy stock in GM. Or, as a US taxpayer, with an out of all control federal government that picks winners and losers for me using my resources at the point of a gun, running its crony based chutes and ladders nonsense.

If I wanted to purchace insurance to cover the downside of risk, I'd purchase insurance. If I do not, then ... who 'deserves' to pay the downside of my risk on my behalf? Would that be, someone forced, at the point of a gun, under threat of loss of their freedom, to cover my risk for me? (Be I GM, AIG, a mortgage lender, or any entity in the economies?)

And what did the GM bondholders do to 'deserve' accepting a kind of risk that wasn't in the game when they accepted the risk of buying those bonds? Were they supposed to plan for the eventuality of someone simply signing pen to paper in government and wiping out those bonds(and in so doing, wiping out the pension assets of hardworking Americans?)

A tribe doesn't pull crap like that without consequences. A tribe can get away with that at most once every few generations. So now, that tribe can lookl to deer in headlights Krugman et. al. to get them out of this bottom of the hill cul de sac by asking more secretaries to print more zeros on pieces of paper.

Politico economists have mucked with the risk-reward engines that drive our economies up hills, by focusing only on policies that try to ride value-proxies downhill. We're there. Now what?

We can huddle around at the bottom of every hill and talk about who 'deserves' to be here. Towards what end? Because it isn't about climbing hills.

[Frediano]

In the old-school, sane economies, there used to be three primary(and one fringe)way to participate in them:

1] ROI totally at risk, with no limits on downside, and no limits on upside. Can work for years and end up roadkill, net 0. This is, man in the universe, as it it. The universe doesn't know 'deserve.' It just deals from the top of the deck.

2] ROI guaranteed as wages. A negotiated ROI for every pull of the pump handle, with the wages discounted to reflect the value of the guarantee. You might 'lose your job' but you are paid right up until the last day at a positive ROI. Guaranteed by who? By others participating with ROI totally at risk.

3] Self-modulated participation in the unlimited risk-reward marketplace via purchase of equities, using anything from 0% to 100% of our discretionary spending.

The fringe way was: as a helpless dependent, relying on the subsidy and charity of others.

There used to be an overhead cost superimposed on 1],2],3] which was, taxation fro necessary common goverment. In 1913, the top earning 1% paid at most 6% of income. As this profligate OPM spending machine did nothing but grow out of all control, it has come to totally dominate the above model, to the point where it now claims to 'run the[sic] economy' via tax rates and interest rates and money supply policy.

What used to be state plumbers, once honorably tasked with keeping the plumbing of state clean and free flowing, have mistaken the plungers we handed them for scepters.

And today is the result.

Are we there yet? Does this infestation of plumber-emperor wannabes really need to screw the pooch even more before we get it?

They've all but killed the risk-reward engines that once drove economies-- not just by trying to punish and ride them like public property ponies, but by selectively colluding with them to implement a shed-risk model. Total tribal insanity, going nowhere but to the bottom of every hill.

The very essence of what Freddie and Fannie are all about is shed-risk, and they are wrapped up in over 90% of all new mortgages; they are the backstop that creates MBS(Mortgage Backed Securities)to encourage banks to shed risk onto taxpayers as part of some half-baked social experiement that blew up in 2008, but that is being doubled down on as we speak.

(Shedding risk onto the pump pullers via MBS was also part of QE).

The 'crisis' was that those who had taken on the risk might bear the dowsnide of risk, and they cried 'crisis' until that dowsnide was shed via forced association onto the entire nation, who has not beneffitted from any upside of that same risk.

Deserves?

[moralist]

In the new shed risk model, who 'deserves' to bear the downside of risk via forced association?

The person who fails to take the prudent actions to avoid being placed in a forced association entirely deserves what they get.

As in, for those who did not willingly enter a risk transaction, which of them 'deserves' to bear the downside of risk?

In my experience, I've found that there is always at least one way to avoid "unwilling" risk transactions.

If I wanted to buy stock in GM, I'd buy stock in GM. Or, as a US taxpayer, with an out of all control federal government that picks winners and losers for me using my resources at the point of a gun, running its crony based chutes and ladders nonsense.

I don't have much to say about stocks, because that situation falls entirely outside my experience. I own no stocks, have no IRA's, or 401K's, no stock market index funds, or no bond funds either for that matter. I own NO debt instruments, because I DO NOT invest in debt. Instead, I invest solely in my own financial ventures because I am totally familiar with how much risk is assumed, and know exactly how they are run, and completely share the ethical values of their owner. ; )

If I wanted to purchace insurance to cover the downside of risk, I'd purchase insurance. If I do not, then ... who 'deserves' to pay the downside of my risk on my behalf? Would that be, someone forced, at the point of a gun, under threat of loss of their freedom, to cover my risk for me? (Be I GM, AIG, a mortgage lender, or any entity in the economies?)

I approach insurance in a similar manner as stocks by simply NOT participating in a Ponzi scam where everyone expects someone else to pay their bills. Instead I choose to accept 100% of the personal responsibility for the consequences of my own actions. So just as I invest in my own self motivated business ventures, I also self insure. And carry no insurance except the minimum for vehicle registration. That runs about $1.50 a day and certainly won't bankrupt me.

And what did the GM bondholders do to 'deserve' accepting a kind of risk that wasn't in the game when they accepted the risk of buying those bonds?

Well, in my opinion I think it's stupid to buy bonds. That's investing in debt, which I don't consider to be a valid investment.

Were they supposed to plan for the eventuality of someone simply signing pen to paper in government and wiping out those bonds(and in so doing, wiping out the pension assets of hardworking Americans?)

Sorry, Fred, I don't know about that either. I have no pension and so cannot be "wiped out". However, I am heavily invested in the goodwill of the people in my local community who I serve. The Bible calls that a treasure laid up in Heaven that can never spoil or be stolen. Since by my own experience that has been proven to be true, that is how I choose to live.

A tribe doesn't pull crap like that without consequences.

I totally agree. Everyone is getting what they deserve as the consequences of their own actions.

A tribe can get away with that at most once every few generations. So now, that tribe can lookl to deer in headlights Krugman et. al. to get them out of this bottom of the hill cul de sac by asking more secretaries to print more zeros on pieces of paper.

Don't know about that either, as I don't invest in paper. I only use paper for transient business transactions.

Politico economists have mucked with the risk-reward engines that drive our economies up hills, by focusing only on policies that try to ride value-proxies downhill. We're there. Now what?

We can huddle around at the bottom of every hill and talk about who 'deserves' to be here. Towards what end? Because it isn't about climbing hills.

I don't bother wasting my time trying to climb other people's hills... and instead build my own hills to climb. ; )

Greg

[moralist]

Greg,

Are you into Esther Hicks -- Abraham?

Even marginally?

MIchael

Hi Michael,

I needed to look up those names as I knew nothing about them because don't watch any television. But just from the little bit I sampled on a talk about gratitude on YouTube, she sounded pretty common sense to me.

I always liked the movie City Slickers where the grizzled old cowboy played by Jack Palance talks with the greenhorn, Billy Crystal.

Jack: Do you know what the secret to life is?

Billy: No, What?

Jack: This.(holds up one finger)

Billy: Your finger?

Jack: One finger. Just one thing. You stick to that and everything else don't mean shit.

Billy: That's great, but what's the one thing.

Jack; That's what you gotta figure out.

For me, the one thing is: Every good thing in life comes from simply doing that's right.

"For the heathen wish for and crave and diligently seek all these things, and your heavenly Father knows well that you need them all, but aim at and strive after FIRST OF ALL His way of doing and being right, and then all these things taken together will be given you besides."

Greg